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Proceedings of the 2002 International Conference on Stable and Just Global Monetary SystemInternational Islamic University Malaysia (2002)DINAR AND DIRHAM EFFECT ON THE BANKING BUSINESSAND ITS SOLUTION1Abdul Halim Abdul Hamid and 2Norizaton Azmin Mohd Nordin1,2Faculty of Business and Law, Multimedia University,Jalan Ayer Keroh Lama, 75450 Bukit Beruang, Melaka, MalaysiaE-mail: 1ahalim@mmu.edu.my, 2 azmin@mmu.edu.myAbstract.One of the issues that might arise when implementing the use of Dinar and Dirham is how it will affect the banking business. The introduction of Dinar and Dirham will retard the growth of the existing banking business. Banks that exist today are based entirely on the concept of interest-bearing instruments (Bexley, et.al, 2000). At present, a major portion of bank’s income is derived from interest income. Interest income is derived from the loan that was given out to a bank’s customer, from depositor’s funds after deducting the required reserve set by the law (Rose, 2000). Banks will loan out a portion of depositor’s money and charge the borrower with interest. The borrower will then deposits this loan into his account in the same bank or other bank, in which a portion of this money will be loan out to some other customer. This is known as money multiplier or money creation (Fabozzi, et.al, 1998). With the implementation of Dinar and Dirham, such money multiplier activities will be difficult if not impossible to occur. This is because each Dinar and Dirham must be represented with actual money that contains a certain weight of gold and silver. In this case Dinar will have 4.3 grams of gold and Dirham will contain 3.0 grams of pure silver (www.e-dinar.com). Dinar and Dirham can be considered as ‘real money’ or ‘live money’ and it is difficult to simply create or print or controlling its supply and demand. This is due to the fact that gold and silver is limited in supply by natural factors and requires scarce resources to produce (Rose, 2000). Therefore, it is different from fiat money, in which its existence promotes money multiplier and interest charges.Dinar and Dirham will promote real economy instead of financial economy. Under the Dinar and Dirham system, for every transaction, trades and investments, real physical money do change hands. Thus, we can say Dinar and Dirham can become a threat to the banking business due to the fact that it cannot be simply multiplied. As a result, the interest income derived from the money multiplier activity shall also be diminished. If this is the case, how banks will survive in the Dinar and Dirham system? The current economic and banking system is a system made by non-Muslim. It is time that Muslims of the world design its own economic and financial system (Ahmed, 2000). Banks have to be totally reformed. The present banking system is irrelevant in Dinar and Dirham system. Therefore this paper is to discuss the type of bank that should exist in the Dinar and Dirham system. The information presented is only conceptual, thus further research in different areas of this proposed type of bank is still needed to make it complete.

Introduction.Let's begin with an issue. The introduction of Dinar and Dirham will retard the growth of the existing banking business. Banks that exist today are based entirely on the concept of interest bearing instruments (Bexley, et.al, 2000). At present, a major portion of bank’s income is derived from interest income. Interest income is derived from the loan that was given out to a bank’s customer, from depositor’s funds after deducting the required reserve set by the law (Rose, 2000). Banks will loan out a portion of depositor’s money and charge the borrower with interest. The borrower will then deposits this loan into his account in the same bank or other bank, in which a portion of this money will be loan out to some other customer. This is known as money multiplier or money creation (Fabozzi, et.al, 1998). A better illustration of money multiplier can be seen from figure 1.

However, with the implementation of Dinar and Dirham, such money multiplier activities will be impossible to occur. This is because each Dinar and Dirham must be represented with actual money that contains a certain weight of gold and silver. In this case Dinar will have 4.3 grams of gold and Dirham will contain 3.0 grams of pure silver (www.e-dinar.com). Dinar and Dirham can be considered as ‘real money’ or ‘live money’ and it is difficult to simply create or print or controlling its supply and demand through the use of interest rate. This is due to the fact that gold and silver is limited in supply by natural factors and requires scarce resources to produce (Rose, 2000). Furthermore, in Dinar and Dirham system, a hundred percent reserve and liquidity requirement is required. Therefore, it is different from fiat money, in which its existence promotes money multiplier and interest charges.

Real economy versus Financial Economy: ‘The Dilemma of Conventional Bank due to Dinar and Dirham’.There are two types of economy. They are: (1) real economy and (2) financial economy. According to Joel Kurtzman in his book titled “ The Death of Money”, the ‘real economy’ is where products are made, trade is conducted, research is carried out and services are rendered. The real economy is where factory workers toil, doctors tend the sick, and where teachers teach and where roads, bridges, harbours, airports and railway systems are built”. He further mentioned that, “The other economy, the ‘financial economy’, issomewhere between twenty and fifty times larger than the real economy. It is not the economy of trade but of speculation. Its commerce is in financial instruments. Mostly, it is concerned with the exchange of equities, such as stocks, and securities, such as bonds and other forms of debt. The latest and largest type of debt that the financial economy trades from a technical standpoint is money.”

Unlike fiat money, which promotes ‘financial economy’, Dinar and Dirham will promote ‘real economy’. Under the Dinar and Dirham system, for every transaction, trades and investments, real physical money do change hands. Thus, we can say Dinar and Dirham can become a threat to the banking business due to the fact that it cannot be simply multiplied. As a result, the interest income derived from the money multiplier activity will be diminished. According to Rais Umar Ibrahim Vadillo in his article titled “Islamic Trading inthe Modern World”(www.murabitun.org), he said that based on traditional Islamic practice, banks are not needed. He also urged the Muslim society to get rid of the bank. In the present banking system, banks widened the gap between the riches (the haves) and the poor (the have-nots) through the use of interest (Diagram A). This gap cannot be narrowed by zakat because the fiat money system itself is already a Riba. However, under the Dinar and Dirham system, zakat and other Muamalat activities such as Musyarakah are bridging the riches and the poor. Zakat will be more practicable in the Dinar and Dirham system because Dinar and Dirham is not ‘a promise to pay’ as in the case of fiat money (Diagram B).

If this is the case, how banks will survive in the Dinar and Dirham system? The current economic and banking system is a system made by non-Muslim. Even with the existence of the so-called Islamic banks, Muslims are still skeptical about it operations (M.Jaffar, 2002). Many Muslims are now abandoning the so-called Islamic banks because they have realized that it is still a usurious institution in disguised as Islamic by its name and appearance. (Vadillo, Islamic Trading in the Modern World).Solution for the Banking Industry.It is time that Muslims of the world design its own economic and financial system (Ahmed, 2000). Banks have to be totally reformed. The new type of bank shall be called an ‘Entrepreneur Bank’ (En-Bank) (Diagram C). How will this bank operate? First and foremost, it is an entrepreneur by itself in which it will require its own capital to invest. It accepts deposits in terms of Dinar and Dirham and it operates electronically based on Dinar and Dirham. All Dinar and Dirham deposited into an entrepreneur bank is ‘real money’ with a hundred percent reserve requirement. Entrepreneur banks act as a safe keeper for Dinar and Dirham through the concept of Yad Amanah (trustee), therefore none of the deposited Dinar and Dirham shall be loaned out.

Entrepreneur Bank’s Tenet # 1: Allah owns all the wealth in this world and bank only act as trustee or manager.An entrepreneur bank should be formed based on the above seven tenets (Table 1). First and foremost, banks should remind themselves that they are the trustees for Allah’s wealth in this world. As mentioned in the Al-Quran;To Him belongs what is in the heavens and on earth, and all between them, and all beneath the soil.(Taha: 6)

To Allah belongth all that is the heavens and on earth. Whether ye show what is in your minds or conceal it, Allah calleth you to account for it. He forgiveth whom He pleaseth, and punisheth whom He pleaseth. For Allah hath power over all things.(Al-Baqarah: 284)

It is He who hath made you (His) agents, inheritors of the earth: He has raised you in ranks, some above others: that He may try you in the gifts He hath given you: for thy Lord is quick in punishment: yet He is indeed Oft-Forgiving, Most Merciful.(Al-An’aam: 165)

If the bank regards Allah as the supreme creator and supreme owner of all the wealth, he must also abide by Allah’s rule. Allah strongly forbid Usury and Riba, as mentioned in the Al-Quran:Those who devour usury will not stand except as stands one whom the Evil One by his touch hath driven to madness. That is because they say: “Trade is like usury”, but Allah hath permitted trade and forbidden usury. Those who after receiving direction from their Lord, desist, shall be pardoned for the past; their case is for Allah (to judge); but those who repeat (the offence) are companions of the Fire; they will abide therein (forever).(Al-Baqarah: 275)Allah further forbid taking extra money out of debt, and He and his messenger declare war to those who commit Riba. In addition, He said without Riba, one will not do injustice to others, neither does others towards him or her. As mentioned in the Al-Quran:O ye who believe! Fear Allah, and give up what remains of your demand for usury, if ye are indeed believers.(Al-Baqarah: 278)

If ye do it not, take notice of war from Allah and His Messenger; but if ye turn back, ye shall have your capital sums; deal not unjustly; and ye shall not be dealt with unjustly.(A-Baqarah: 279)

Entrepreneur Bank’s Tenet # 2: Promote real economy instead of financial economy.Ideally, banks should promote real economy instead of financial economy. The present banking system are so corrupted that it disguised usury as halal. In real fact, the banking system commits usury everyday, which result in death of thousands of people throughout the world, the starvation of many others, the creation of unemployment situation, the destruction of small business and the general impoverishment of most mankind. In short banks are regard as destructive, parasites, usurious, promote slavery, monopolistic and bloodsucker. (Vadillo, Islamic Trading in the Modern World). Therefore, banks have to be shifted from these negative remarks. They have to leave these traditional roles (refer to Diagram A) and set to become the institution that promote the development of Muslim ummah (refer to Diagram B). One of the objectives of Islamic financial system in the context of tawheed and taqwa is to make the life in this world a happier and prosper place through a financial system that portrays an Islamic socioeconomic values. In an Islamic ethics,each and every one of us has the obligation to contribute to create a system based on Islamic teachings. Islam gives the rights to its ummah to seek help from one another and help each other according to each ability (Yakcop, 1996). Therefore, an entrepreneur bank has the obligation to help Muslim ummah to develop themselves in order to prosper the society.Entrepreneur Bank’s Tenet # 3: Discourage debt and encourage Musyarakah or Joint venture profit and loss sharing.Fundamentally, banks should change its role from becoming a debt provider to a partnership (Musyarakah). Debt should be highly discouraged and should be avoided whenever possible. As mentioned in a hadith narrated by ‘Aisha (r.a), the wife of the Prophet: Allah Apostle used to invoke Allah in the prayer saying “.... O Allah, I seek refuge with You from the sins and from being in debt.” Somebody said to him, “Why do you so frequently seek refuge with Allah from being in debt?” The Prophet replied, “A person in debt tells lies whenever he speaks, and break promises whenever he makes them”. This clearly showed that being in debt should be avoided. How can this be possible for banks? Perhaps, banks should become a trustee and a partner in business, instead of being a guarantor for debts.Entrepreneur Bank’s Tenet # 4: Be an active partner and provide consultation to its partners.Here, an entrepreneur bank should become an active partner and able to provide professional consultation to entrepreneurs. If a customer approach the bank for business loan, an entrepreneur bank should treat it as a partnership (Musyarakah Mutanaqisah), in which the bank shall also take part in running the business. Musyarakah Mutanaqisah (Diminishing Partnership) is the sharing of the revenue with progressive dilution of shareholding. An entrepreneur bank shall not merely observe from afar and reaps the profit when the business succeeds and left the business in despair when it fails such as in the present situation. Banks should provide advises and assistance to entrepreneurs on how to improve the performance of their business. This is the most crucial element in an entrepreneur bank because this may become its major source of income replacing the interest income. Initially, the ownership of the business will be divided between the entrepreneur and the bank with the ratio agreed by both parties. The entrepreneur shall buy the shares from the bank through its profit until they owned 100 % of the business. In other words, banks have to release the business to the entrepreneur when they afford to buy back all its shares.Entrepreneur Bank’s Tenet # 5: Encourage spending on savings not on credit.An entrepreneur bank should encourage spending on savings instead of spending on credit. If its customers want to buy a car or a house, or planning to go for a vacation, design their financial planning so that they can afford it. Perhaps, customer may opt for Musyarakah Mutanaqisah Home Financing (Lease Purchase with Diminishing Partnership) In a Musharaka Mutanaqisah home financing scheme the customer and financier (Islamic Bank) jointly acquire and own the property. The financier then leases his share of the property to the customer on the basis of Ijara (lease). The customer, as an owner-tenant, promises to acquire periodically the financier's in the property. The customer pays rental to the financier under Ijara, which partially contributes towards increasing their share in the property. (eg. If the bank owns 70% of the property and the customer owns 30%, and the customer's monthly rental is RM1,000 then RM700 goes to bank and RM300 goes to increase the customer’s share of the property.) At the end of the lease term and upon payment of all lease rentals the customer would have acquired all the financier's shares and the partnership will come to an end with the customer being the sole owner of the house (www.ihilal.com). Refering to Diagram D, under the present scenario, banks will receive double interest income, which is x percent from house developer and y percent from homebuyer. Whereas under the entrepreneur bankingsystem, once the bank received income from investing in the housing project, it will not charge anything from home-buyer for the Musyarakah Mutanaqisah agreement except for the fees incurred (such as legal fees, etc.) to purchase the house.

For smaller expenses, an entrepreneur bank should encourage the used of debit card instead of credit card. Credit card promotes overspending, which means a person spends using money that he or she does not have. This is against Islamic teaching, as mentioned in the Al-Quran:Those who, when they spend, are not extravagant and not riggardly, but hold a just (balance) between those extremes.(Al-Furqan: 67)Allah further stated that overspend makes a person closer to the devil, as mentioned in the Al-Quran:Verily spendthrifts are brothers of the Evil Ones; and the Evil One is to his Lord (Himself) ungrateful.(Al-Isra’: 27)Entrepreneur Bank’s Tenet # 6: Encourage business creation and entrepreneurship.Next, an entrepreneur bank should encourage Muslims to do business instead of working with others. The Prophet encouraged his ummah to do business. Al Suyuti mentioned in Al Jami` Al Saghir, a Hadith on the authority of Rafi` that: The Prophet (pbuh) was asked: "which are the best forms of income generation?" He (pbuh) replied: "A man's labor, and every legitimate sale". This will give all Muslims an equal opportunity to prosper and at the same time, discourage monopoly business. Those who worked hard enough will earna just reward for their effort. As mentioned in the Al-Quran:And when the Prayer is finished, then may ye dispersed through the land, and seek of the Bounty of Allah: and celebrate the Praises of Allah often (and without stint): that ye may prosper.(Al-Jumu’a: 10)Entrepreneur Bank’s Tenet # 7: Educate Muslim ummah on Muamalat matters.Last but not least, an entrepreneur bank should educate the Muslim ummah about Muamalat matters and help strengthened the ummah faith and belief in Allah. This is because the stronger the faith and belief in Allah, the stronger they will be in adhering to Allah’s command. A research conducted in Kuala Lumpur, Malaysia showed that almost all Muslim’s respondent knew the existence of Islamic banking in Malaysia, however, only half of it used the facilities. Out of this half, only 15 percent able to answer correctly the meaning of each product offered by Islamic banks. This is due to the fact that Muamalat does not being emphasize in the early stage of learning about Islam (Abdul Hamid, 2001). An entrepreneur bank should therefore emphasis the teaching of Muamalat and daily transaction activities to the Muslim ummah.Conclusion.Finally, banks should be more innovative, creative, more sophisticated and more professional when dealing with Dinar and Dirham system. The newly designed e-Dinar may take most of banks’ role as the medium for payment (www.e-dinar.com). It is only a matter of times that Dinar and Dirham system becomes a reality. And hopefully, when it’s finally arrived, banks are prepared with the new renaissance of an Islamic monetary system. To fine tune with this ideal ideology, lets contemplate this hadith narrated by Abu Huraira : The Prophet said, “An Israeli man asked another Israeli to lend him one thousand Dinars. The second man required witness. The former replied, “Allah is sufficient as a witness.” The second said, “I want a surety.” The former replied, “Allah is sufficient as a surety.” The second said, “You are right”, and lend him the money for a certain period. The debtor went across the sea. When he finished his job, he searched for a conveyance so that he might reach in time for the repayment of the debt, but he could not find any. So, he took a piece of wood and made a hole in it, inserted in it one thousand Dinars and a letter to the lender and then closed, i.e., sealed the hole tightly. He took the piece of wood to the sea and said, “O Allah! You know well that I took a loan of one thousand Dinars from so and so. He demanded surety from me, but I toldhim that Allah’s guarantee was sufficient and he accepted Your guarantee. He then asked for a witness and I told him that Allah was sufficient as a witness, and he accepted you as a witness. No doubt, I tried hard to find a conveyance so that I could pay his money but could not find, so I hand over this money to You.” Saying that, he threw the piece of wood into the sea till it went far into it, and then he went away. Meanwhile he started searching for a conveyance in order to reach the creditor’s country. One day, the lender came out of his house to see whether a ship had arrived bringing his money, and all of a sudden he saw a piece of wood in which his money had been deposited. He took it home to use for fire. When he sawed it, he found his money and the letter inside it. Shortly after that, the debtor came bringing one thousand Dinars to him and said, “By Allah, I had been trying hard to get a boat so that I could bring you your money, but failed to get one before the one I have come by.” The lender asked, “Have you send something to me?” The debtor replied, “I have told you I could not get a boat other than the one I have come by.” The lender said, “Allah has delivered on your behalf the money you sent in the piece of wood. So, you may keep your one thousand Dinars and depart guided on the right path.” This hadith tells us that if weare honest and sincere in our endeavor to create a true Islamic monetary system as well as creating a just and fair banking system, Allahsurely will give us the way.

Q1) I own several 25,000 dinar bills that I have kept as an investment.
What happens to their value if their is a redomination. Will they have a
value of 25? I was hoping they would be valued higher against the
dollar and I would be able to make a profit on my investment.

Answer :
Hi Bill, yes "redenomination" means they will remove 3 zeroes from
notes. So your 25,000 notes will be exchanged for new 25 notes but at a
new ratio of say 1.175:1 instead of 1175:1. You won't lose any money
(value is retained minus the trading fees), and in the long run you may
make some profit if the Dinar appreciates naturally vs the $, but all
these "become a millionaire by changing up $1k worth of Dollars for $1k
worth of Dinars" "Dinar pumpers" have been lying and scamming people all
along with fake invented "intel", etc. A 99,900% profit has never, ever
happened in any RV process. Take a look at what the Turkish Lira (6
zeroes removed), Venezuelan Bolivar (went from 2000:1 to 2:1), the
pre-Euro (franc, pesetas, deutschemark, etc) to Euro currency changeover
went through to understand the process better. Hope this helps.

Q2) Your explanation on "re-denomination" in this case I think is flawed. In
my opinion if you take their present total outstanding currency of 29 T
Dinars, remove three digits and you get 29 B Dinar. Now spread this
over the collective wealth of the country and your Dollar value per
Dinar would be in the hundreds it not thousands. The rumored value of 3
to 4 dollars reflects the current outstanding money and to issue
smaller bills is only in light of the new reality.

Answer :
No Peter, my explanation of how every single redenomination has worked
in history including Iraq's neighbour Turkey isn't "flawed" at all:-

USA
: There are $10.2 trillion (last M3 figures) from a country with a
population of 310m people. This works out to approx $32,903 printed per
American.

Euro : There are €8.5 trillion in existence (ECB M3
figures) from an entire continent with a Euro-using population of 327m
people. This works out to approx €26,000 Euro's printed per European.

Iraq
: There are 29 trillion Dinar's in existence from a country with a
population of 31m (Iraq). This works out to 935,483 Dinar's printed per
Iraqi (blatantly obvious hyperinflation).

If you remove 3 digits,
yes you get 29bn Dinar but those Dinar will be valued at say 1.17:1
instead of 1,170:1. The dollar value will not change - just as the Iraq
Central Bank have openly stated it won't back in April as reported on
Iraqi Alsumaria TV. It's only a few vested interested conmen who just
happen to sell Dinar who keep pumping the "instant millionaire"
nonsense. If holding just $1k worth of Dinar will make you a
millionaire, then by extension, you must believe every Iraqi who owns a
house / car will be given between $50m-100m each if they sold it and
changed the 50m-100m Dinars up at an FX outlet, and that the average
$2k-$4k Iraqi income will become $2m-$4m. Um, no. That's not how it
works at all.

Just to add, Peter : Countries can't and don't just magic 99,990% more
money into thin air through an RD (re-denomination). The "rumored" value
of $3-4 you mention was the value of what were known as "Swiss Dinar's"
under Saddam Hussein. They got their name from the Swiss printing
plates used (which were of much higher standard than the 3rd hand ones
Iraq otherwise had), and this was the currency used prior to the 1990
Gulf War (the first one) after which they ceased to be legal tender.

Since the supply of Saddam notes increased while the supply of Swiss
Dinar notes remained stagnant (even decreased because of torn / damaged
notes without replacement), the Swiss Dinar appreciated against the
Saddam Dinar notes (which is exactly what "inflation" is that some
pumpers absurdly claim "doesn't affect Iraq and thus makes it
'different'"). In fact, the northern part of Iraq (Kurdish) which
continued to use Swiss Dinars partly evaded inflation, which ran rampant
throughout the rest of the nation.

The old Dinar was $3.33 against the $
because it WASN'T inflated. The Saddam Dinar fell below 1100:1 against
the $ due to inflation during the economic sanctions (if you can't
borrow or trade then you can only print). The $3-4:1 from the 1980's
also involved Saddam picking an arbitrary value to peg the Dinar to
which is also not the case with the market valued NID today. The reason
the Dinar is so weak is because it's overprinted. It really is that
simple.

Q3) Hi there! Your explanation does make quite a bit of sense, however the
iraqi dinar replcaed the Kuwaiti dinar after iraq stole large amounts of
banknotes in 1990 when Iraq invaded Kuwait. Later the Kuwaiti dinar was
restored once Kuwait's currency and new banknote series was introduced.
This resulted in a drastic devaluation of the Kuwaiti dinar at about
just a few cents. It wasn't until 2003 when Kuwait finally pegged their
currency to an exchange rate of approximately 1 dinar= 3.33745 dollars.
Keep in mind that Iraq and Kuwait's situations were a bit different,
however the profit of those who invested in the Kuwaiti dinar did in
fact become millionaires overnight.

An opportunity like this investment
does not come along that often so I would jump on it while you still
have the chance, even if you have just an extra $100 you can afford to
spend. It's not like your loosing your whole life savings (unless you
are one of the gullible ones) on this investment. As long as Iraqi wants
to progress, the rate of the currency should revalue. I don't quite get
why people believe that Iraq wil just drop the 3 zeros off of their
banknotes and just leave the value as is, it would be ludacris to do
such a thing. Let's say the United States was faced with this situation
and you have a $100 but they decide to drop the 2 zeros (3 zeros in
Iraq's case) off of your hundred dollar bill, that would leave you with a
one dollar bill, therefore your hundrend dollar bill is now only worth
only one dollar because the value of our currency stayed the same. 1
dollar bill= 1 dollar...simple as that.

In Iraq, they are currently
carrying around 25,000, 10,000 etc. dinar banknotes. Once Iraq drops the
3 zeros from that 25,000 banknote, it will become a 25 dinar banknote,
but they are saying the value will stay the same. That cannot happen,
everyone will loose so much money and business that have invested and
are currently being ran in Iraq will loose tons and tons of money. Let
me make this a little more simpler for those who are new to this
investment. Say you have a 50,000 dollar bill (just as an example, I
know we don't really have a $50,000 bill) for a new home but the U.S.
decided to drop the 3 zeros off of your $50,000 bill making that bill
only $50.

What kind of house is fifty bucks going to get you? Nothing.
Iraq has to revalue their currency if they not only want to have their
money to be worth anything, but also if they want to progress as a
country. I don't know if many people know this but, Iraq has the largest
oil reserve in the entire world, they will not stand to have such a
devalued currency for much longer if they want to make any money at all.

Answer :
Bill, the Iraqi Central Bank have openly stated "re-denomination"
multiple times, and "revaluation" not once. Only Dinar salesmen with
vested interests are using "RV" over and over whilst the ICB are saying
RD (lop) over and over. They do intend to appreciate the Dinar somewhat
on top of the RD, yes, but not the 99,000% some people have got confused
with (and it won't happen overnight either).

Angela, you're
confusing the Kuwaiti Dinar with the Kurdish (Old Iraq) Dinar. They're
not the same. You're also seriously misunderstanding how redenomination
works. It doesn't take 99% of wealth away from people, but nor does it
magic 99,900% of wealth out of nothing. Purchasing power is retained so
businesses don't lose anything. What happens when zero's are lopped is
that prices are readjusted to match:-

For example, if current 25k
Dinar notes are turned into 25 Dinar notes, prices are adjusted by
same. So eg, a 75m Dinar house now becomes a 75k Dinar house. A 1,000
Dinar loaf of bread becomes a 1 Dinar loaf of bread, etc. Look at what
happened to Turkey to understand the process better - they lopped 6
zeroes off. Of course Turkish bread was not still priced at 1,000,000
Lira when 1m Lira banknotes changed to 1 Lira, it was repriced down to 1
Lira along with the new banknotes. This is the whole point of a
redenomination : get prices of thing (in terms of zeros) back to sanity
and parity with other countries which boosts confidence in the currency
& economy.

Also, not only is your fact on Iraq's oil reserves "being the largest" incorrect...
http://www.nationmaster.com/graph/ene_oil_res-energy-oil-reserves

...but
it's also irrelevant to the value of the Dinar because it is just as
much a FIAT currency as everyone else's. Just because a nation has a
nationalized oil industry doesn't mean its currency is backed by
anything (any more than the $ is backed by Chevron or the £ is backed by
BP). That's the first mistake first-time Dinar gamblers usually make :
confusing nationalized oil with a specie currency. They are not the same
thing at all. The Iraqi Dinar is a unbacked FIAT currency (which is
precisely why it was so overprinted and devalued in the first place).

What's more, most of the world's oil is purchased in $ not Dinars (hence
the origin of the term "petro-dollar"). And on top of that, many of
Iraqi's oil fields are part-owned by non-Iraqi's (remember the 2009 oil
services contracts?), so even if the Dinar was oil-backed (which it
won't be for as long as buying countries are using FIAT currencies of
their own), you can't just pick a figure and say "lets print ourselves
all that wealth now before we've even dug it up, and then try and earn
it all again when we actually do sell it in years to come". That's not
how the Forex market works at all.

Q4) Brian, I apologize, you are correct about the oil reserve in means of
“what was supposedly proven”, but it is believed that Iraq has much
more oil (approximately twice as much than what was previously
estimated) than what it was said to have, we will have to wait and find
out. However, it is the Kuwaiti Dinar, not the Kurdish dinar that I am
referring to. Here is the link so you can see what I am talking about
http://en.wikipedia.org/wiki/Kuwaiti_dinar

Also, if prices are just
readjusted to match and one Iraqi dinar is still equivalent to
approximately $1170, then Iraq will still stay just as poor. You would
think that a country with so much oil and potential wealth wouldn't have
such a undervalued currency, especially if they plan on progressing
anytime soon. In 1959, 1 dinar= $2.8 dollars, then in 1971 and 1973, 1
dinar= 3.3778, later reducing to 1 dinar= $3.2169. After the United
Nations put sanctions on Iraq (because of Iraq invading Kuwait) new
notes were issued. Finally, in 1995 the Iraqi dinar devalued to $1 =
3,000 dinars. The value did increase a bit throughout the years, but why
keep the currency devalued for so long?

Do you believe they will keep
their currency at such a low rate for much longer? Back to readjusting
their prices to match their currency, what happens if the prices do get
readjusted but someone only has a 25,000 note wanting to buy something
that is only worth 25 notes? Does that mean the cashier will have to
hand back that person 24,975 banknotes in lower denomination notes? They
wouldn’t even have nearly that much in their drawer. Not everyone will
have a credit card (smart card) just like not everyone uses a credit
card in the United States, England, Australia, etc. The bigger
denomination notes such as 25,000, 50,000, etc. are still going to be
allowed to be used until they are all out of circulation, businesses
will not be able to deny a person who wants to purchase items with a
larger note.

The Turkish Lira and the New Turkish Lira were both allowed
to be used until December 25, 2005 which was the last day the old Lira
would be accepted. After this occurred, the value of the Lira was valued
at USD $1= 1.51 YTL. The Turkish Lira ended up stabilizing and rose
against the U.S. dollar, which means their currency did in fact revalue.
This same exact process seems to be happening right now with Iraq and
its currency. Wouldn’t you say that once the 3 zeros are taken off the
banknotes, then the currency will revalue just as it did with the
Turkish Lira?

Answer :Hi Angela, thanks for your comment. As mentioned previously, the Dinar
is "undervalued" because it's overprinted and the cure for that is not a
further 1,000x expansion in the money supply (turning a $27bn Dinar
supply into a $27tn supply by giving every 1,000x more for their Dinars
than they bought) - that will just result in another Zimbabwe (where
everyone's a billionaire but the price of a loaf of bread is 1.3m).

I
can only repeat what I mentioned earlier : The Dinar is a FIAT
currency, and like other FIAT currencies, it's value is derived by how
many are printed and traded. What's underground and won't be sold until
2015-2020 is as irrelevant to the current Dinar value as untapped Texan
oilfields are to the Federal Reserve $ or undiscovered Canadian "shale
oil" is to the CAD. Norway has a lot of oil, and neighboring Denmark
hardly has any, yet both currencies (NOK & DKK) are within 5% of
each other. Simply finding oil does not magic a currency's value up by
x0,000%. That smaller influence occurs when it is actually sold and
money changes hands (and only then if it's actually sold in its native
currency and not "petro-dollars"). You can't sell the same barrel of oil
twice (once to yourself by printing yourself imaginary wealth now, and
once again when you actually dig it up and sell it for real in a decades
time).

Kathryn's excellent post (UK) correctly addresses the
issue : Over 103 other countries on Earth also have oil and / or natural
gas reserves in some form. There is absolutely nothing whatsoever
unique about Iraq's. Every country on Earth has debt-based money (FIAT
currencies) including the Iraqi Dinar. No country has an asset backed
anything and hasn't for decades since the world came off the gold
standard in the 1970's.

To those who think oil will magically
sustain 1,000x more Dinars, here's a Mid-East reality check : There are
only 1tn Saudi Riyals (approx $266bn) in circulation for a country that
has more than 4x Iraq's oil reserves and more than 5x Iraq's daily oil
production. There are also only 985 UAE Dirham's (approx $268bn) in
circulation.

$29tn worth of Dinars would also mean that people
who claim the Dinar will be "RV'd" to near 1:1 vs the $ are basically
saying that a 3rd-world war-torn country smaller than Canada should have
a monetary supply that's larger than all US & Canadian Dollars,
Euros, Renminbi, Rubles and Yen *combined*, and approx 60% of the entire
planets global combined GDP (even though Iraq sells less than 5% of the
worlds oil), not to mention a currency that's 116x higher than Saudi
Arabia) just because they found a little oil that 100 other countries
also have and because they sell slightly more oil than Algeria and less
than Mexico or Brazil. It literally defies all common sense, and basic
mathematics / economics.

No matter how you "cut the cake", you
simply cannot print yourself more wealth because the more you print, the
weaker the currency gets. Take a look at Zimbabwe for a nation of
"self-declared paper millionaires". Iraq won't stay poor in the long run
because they can reinvest oil sales - but the point is that it's the
*sale* of oil revenue already sold today not an RV/RD that generates
wealth. An RD won't make Iraq wealthier no, but that's not its intention
(and nor is it possible for any country to become 1,000x richer just by
declaring it), and the only people who have been sucked into believing
an RD = "a millionaire for $1,000" are confused amateur first-time Forex
gamblers who do not understand the process, have never held any other
currency through a similar RD before, and are being "bounced" around
from one confused Internet "pumper" to another.

"Back to readjusting their prices to match their currency, what happens
if the prices do get readjusted but someone only has a 25,000 note
wanting to buy something that is only worth 25 notes? Does that mean the
cashier will have to hand back that person 24,975 banknotes in lower
denomination notes? "

No, no, no. OK it's clear there's some
confusion here, so I'll explain the 3 steps of a redenomination : A
redenomination (RD) simply means taking the zeroes out of the economy.
Three things are done:-

1. All old banknotes are swapped for new
lower denom ones at a fixed ratio (usually 1,000 for ease of exchange)
within a fixed time-frame (3 months for prior Iraq banknote swaps). Eg,
25,000 Dinar notes are swapped for 25 Dinars. Iraqi's will change their
old for new notes at their banks. The below article explains what
happened during Iraq's prior bank-note swap when the "Swiss Dinar" was
taken out of circulation in the Kurdish region for good during 2003 and
Saddam's face removed from notes. When the time-limit is up, any old
notes not exchanged for new are demonetized and become worthless.

It
also states in the final two questions : "Q:Can dollars also be
exchanged for new Iraqi dinars What will be the conversion rate for
dollars?
A:Dollars will not be converted directly into new dinars
during the official exchange. Following the exchange, dollars will be
convertible directly into new dinars at the market exchange rate" and
"Q:Will it be possible to exchange currency outside of Iraq? A:No. The
only official currency exchange locations will be located within Iraq":-
http://www.exchangerate.com/iraq_currency_exchange.html

2.
The currency is adjusted by the same factor for the *new notes only*.
Eg, a 1170 vs the $ becomes 1.170 vs the $. You won't be paid $1m for
handing in $1k worth of old notes, you'll just be given the equivalent
in new notes (1k Dinars at 1.17 in place of 1m Dinars at 1170). This is
what confuses many amateur Dinar speculators the most.

3. Prices
in Dinars are also adjusted by the same factor. Eg, a 75m Dinar house
becomes a 75k Dinar house. A 1,000 Dinar loaf of bread becomes 1 Dinar.
250,000 Dinar average rent becomes 250 Dinar rent, etc.

This
doesn't have to be in multiples of exactly 1,000, it could be anything.
But the PP (Purchasing Power) of *current* notes doesn't change the same
way some "pumpers" are hyping it. The Iraqi Central Bank have openly
stated the Dinar RD will be "based on Turkey". For those who don't
remember Turkey's RD / lop, here's the official brochure explaining it:-
http://www.tcmb.gov.tr/ytlkampanya/bro.php

People
weren't given $1m in cash just for holding $1 worth of Old Turkish Lira
during their 6-zero RD/lop. And likewise, people won't be given $1m in
cash just for holding $1,000 worth of Iraqi Dinar during their 3-digit
RD/lop. The Dinar may appreciate in time when their oil exports increase
in time and demand for Dinar rises, but not by silly 10,000% figures
purported by some dishonest Dinar salesmen preying on FX first-timers.
Hope this helps.

Q5) Hi again Brian, and thank you for your response as well. I understand
what you are saying however, when Turkey dropped the six zeros off of
their currency they revalued the new Liras (as well as the old ones
until they became worthless at the end of that year) immediately
afterwards. This means that whoever was holding the older Turkish Lira
before the end of 2005 (when they became worthless) were able to
exchange their Liras for U.S. dollars, Euros, etc. at a rate of 1 U.S.
dollar= 1.29 Liras. The Lira actually became stable and rose past the
U.S. dollar. They didn't exchange their Liras for the new Liras, at
least not the ones who purposely invested in the Turkish Lira currency,
they exchanged them for U.S. dollars, Euros, and so on. I actually know
someone who, not only invested and made a profit off of the Turkish
Lira, but also the Kuwaiti Dinar. Iraq does in fact need to have a
stabilized currency if they want to be able to progress and be right up
there with other stablized countries. I guess only time will tell, we
will just have to wait and see how this will all play out.

Answer :"Hi again Brian, and thank you for your response as well. I understand
what you are saying however, when Turkey dropped the six zeros off of
their currency they revalued the new Liras (as well as the old ones
until they became worthless at the end of that year) immediately
afterwards."

Hi Angela. Actually Turkey didn't "RV" - it was a
straight RD/lop. On 31st Dec (last day for TRL Old Lira), the value was
1,339,320:1 :-http://www.xe.com/ict/?basecur=TRL&historical=true&month=12&day=31&year=2004&sort_by=name&image.x=51&image.y=15

And
on 3-4 Jan 2005 (first day of TRY New Turkish Lira), the value was
1.347:1. The real value difference was under 1% which is well within the
perfectly normal daily fluctuation that happens in all currencies:-http://www.xe.com/ict/?basecur=TRY&historical=true&month=1&day=3&year=2005&sort_by=name&image.x=31&image.y=18

The
1.29 figure you're using from Wikipedia is the mean average value over
the whole of 2005 when it appreciated by around 4% over the first year
due to increased trading. But it wasn't part of any "RV" process - it's
just due to increased trading demand when the NTL was seen as a more
serious currency without all the zeroes. This is also entirely possible
with the Iraq Dinar - that it will go up slightly by maybe 5-10% when it
loses its zeroes, and maybe appreciate more in the longer run if and
when it develops an economy beyond just selling oil for dollars (most
oil is priced and traded in $ not Dinars).

But that's not due to
an "RV" trying to create money from nothing without inflation, it's due
to market demand. And it's certainly not a 99,900% increase some conmen
are targeting confused first-time speculators with. Same goes with the
Venezuelan Bolivar (another oil economy) RD in 2007 : 2,144:1 to 2.147:1
= No RV. This is normal for the redenomination process.

Q6) Brian, I am so glad you were able to explain all of this to me. Not
once, in the past 4 years have I been able to figure out all the
possibilies as to what could happen with the Dinar. I think I may have
(did) misunderstand much of what I have heard and read about this
investment. One of my classmates in college told me that their parents
"made money" off of the Lira but maybe they misunderstood their parents,
or they just straight up lied for some odd reason (keep in mind that
the conversation was about currencies).

Let me just make sure
that I understand this correctly, once Iraq drops the three zeros off of
their currency, the banknotes I currently hold will not have a change
in rate, but the new currency may end up revaluing eventually (yet, it
still will not apply to my banknotes). Soon after, my banknotes will
become worthless and will no longer be legal tender. However, during
this time period both currencies will be legal tender and will both be
able to be used for purchasing. The reason why the value will not change
on the old banknotes, but will on the new notes is because they will be
considered two seperate currencies not one whole currency.

Is that correct? Now that I really put a lot of thought into it, it does make a lot of sense.

In
your opinion, do think that the U.S. and Iraq have some sort of deal
that was made since the U.S. forgave Iraq of it's debt that was owed? Do
you think it is possible for Iraq to revalue it's currency before it
drops the 3 zeros for maybe a couple of months until all the larger
banknotes are out of circulation so there is no confusion, like there
was with the Lira and other currencies that used two seperate currencies
at the same time, and then drop the 3 zeros? Maybe that was the plan on
how Iraq would be paying the U.S. back the debt they owed them? I am
just curious if you think that could be a possibility, or if it would be
completly bizzare.

Thanks again for your insight on this, it has really helped clear things up for me, as I hope it has for others as well.

Answer :
Hi Angela, yes that's absolutely how it works. You're not alone in this
as there's an obscene amount of fraud and disinformation in the amateur
investment community that makes even 2nd hand car dealers look honest!

As
far as taking larger banknotes out of circulation are concerned before
the RD, some people have got the wrong idea in thinking it means they're
being torn up whereas in reality, many are being used for inter-bank
transactions instead of public circulation. I don't think any "RV" is
likely before a lop because there's simply nothing to RV. A
"revaluation" simply means "moving a peg" (like China have revalued the
CNY vs the $). The Dinar's low value genuinely does match the huge 29tn
worth of currency created, and the only way of bringing that down is an
RD. Iraq's 29tn money supply is already 30x higher than Saudi Arabia's
whilst their economy is 5.5x smaller. That fact alone is enough to make
the Dinar worth 165x less than the Riyal even without taking their 80%
destroyed infrastructure and state of near civil war into consideration,
or the fact much of their current economy is imported $ driven
subsidies and foreign aid rather than Dinar driven exports.

I do
believe the Dinar will go up in the long run, but not radically so. Many
Forex "newbies" are confused and believe a country's currency should
match its resources. This isn't the case anywhere on Earth because a
fiat currency is a liquidity measurement (how much money is needed for
ongoing trade at any one time) - not a "gold standard" full reserve bank
of every potential mineral export for the next millenium up to 3011AD
(and supposedly unique only for Iraq!) all squeezed into 2011's money
supply valuation! Oil isn't owned by central banks either.

Saudi
Arabia has $27tn of proven oil reserves yet only $266bn worth of Riyals
in circulation. Kuwait has $11tn of oil but only approx $120bn of Kuwait
Dinar in circulation. UAE has over $10.3tn of oil yet only $268bn worth
of Dirhams. Russia has $7.8tn of oil yet only $720bn worth of Rubles.
Nigeria has $4tn of oil but only $75bn worth of Naira. Venezuela has
$10.3tn of oil yet under $175bn worth of Bolivars, etc. People thinking
"well Iraq has around $12-15tn of oil sales for the next century
therefore it must have $12-29tn worth of currency in circulation today"
are seriously misunderstanding how the world works.

Iraq's net
export economy would only be $12-15tn if they sold the whole lot at once
all in one year without using a single drop for themselves or importing
a single thing (which is impossible). And then when it ran out after a
year, they'd sink like a stone. Iraq may have $12tn, $15tn or even $20tn
worth of oil, but it won't be selling even 1/10th of it at any one time
even with restored infrastructure (and won't be exporting it all
either). And that's assuming every drop of oil is sold in Dinar's,
whereas it's usually sold directly in $. And most of the currency earned
is simply sent straight back out again in the form of imports.

Iraq
currently exports $49.1bn - but they also import $42.56bn so the net
export is only $6.54bn, which isn't much money at all. (To keep things
in perspective, Russia's net export is $139bn, oil production is 10m bbd
and the Ruble is only 27:1 vs the $). $6.54bn per year is the real
trickle rate at which Iraq as a whole is getting richer from oil. Total
oil reserves for all countries make little impact on their paper fiat
currency valuations. It's total amount of money created (M2/M3 figures)
that determine a currency's value relative to another, and at 29
Trillion, Iraq has printed more for its 31m population than USA + Europe
+ China + India combined have for 3.4bn people which is why it's so
weak and devalued.

As for US debt forgiveness, a lot of that has
to do with "favors for oil contracts" politics in my opinion. I'd like
to thank you too for this great conversation!

Q7) Hi again, Brian, I had one more quick question. Sorry for the hundred
questions but, I was just wondering if you understand what this sentence
in this article is explaining, or what it really means. I'm not asking
you to read the entire article since it is very long, i'm just confused
about the part that says "after the balance sheets have been cleaned up,
revalue the remaining foreign currency denominated balance sheet
items." If you type in "revalue" in the box at the top of the article
and press enter, it will bring you to that sentence.

Here is the article link: http://www.imf.org/external/np/loi/2011/irq/030311.pdf

Answer :
Hi Angela. "Balance sheet items" usually refers to debt owed to other
countries. Although there's been some voluntary debt write-off by some
countries, Iraq's debt is still quite high. The main purpose is to stop
the Dinar tanking the day it starts trading (due to countries and other
foreign entities all trying to cash in on the debt at once). The wording
seems to talk about revaluing Iraq's debt for those countries who
haven't written it off.

As said previously, the Dinar will
probably appreciate in time as their GDP increases (as long as "growth"
isn't just oil sold for $ but goods that are actually priced in Dinars).
What is wrong and what I do speak out against is the deliberate fraud
committed by some Dinar conmen "pumpers" (named because they're doing a
classical "pump and dump" on the outgoing old Dinar notes) who openly
and deliberately missell the Dinar as having a 99,900% ROI profit and
creating fake "intel" to "support" that when the Iraq Central Bank has
repeatedly and clearly stated it will do an RD (lop).

One popular
licensed pumper (like many others) sells $85 worth of Dinar's (100,000
Dinars) for $185. That's an insane 115% spread. Normal FX cash spreads
are under 5-10% whilst pro-Forex trading is in "pips" (a "pip" is 1/100
of a cent). Even higher denom trades are a total ripoff, ie, selling 1m
Dinar's ($854 worth) for $1,220. On top of that, they also charge a
minimum $150 per 1m Dinar's ($854) fee when changed back leaving people
spending $1,220 and getting back $704. Between 40-80% of the investment
would have been swallowed up in outrageous trading spreads & fees.
At those fees, the Dinar could "RV" up a whopping 70% and many still
wouldn't break even.

This has happened to many folks including
elderly people who gambled their pensions on it and have since been
evicted from their homes (after people mislead and lied to over how and
when it would happen). Needless to say, this popular "Dinar Trade" has
since stopped trading Dinars after rumors of a lawsuit being filed by
one group of people and "strong" demands (threats) for refunds came from
a few others. And that's a licensed one! Unlicensed ones using Dinar's
smuggled in from Jordan are illegal, and heading for jail on federal
fraud charges:-

"A South Dakota man who banked hundreds of
thousands of U.S. dollars by selling Iraqi dinars to investors outside
the state has been indicted on federal fraud charges... What dinar
dealers don’t say, according to Jim David of South Dakota’s Better
Business Bureau, is that *Iraqi currency cannot be exchanged for dollars
in the U.S*. "It seems as if people don’t realize that they’d have to
take it to Iraq to get anything out of it,""
http://dinarscams.com/?p=1

Q7) Hi Brian, I absolutely agree with you, it's terrible what the pumpers
are doing to people and their emotions. I for one have never bought into
the lies of any pumper, it would be ridiculous to believe someone when
they say every single week that the iraqi dinar is going to revalue on
this or that day of the week. It is very much like the story about The
Boy Who Cried Wolf. What happened with me was, I was simply
misunderstanding my research. You have really cleared everything up for
me though and I thank you again for that.

Do you think it may be
possible that Iraq will revalue its debt for the countries who have
written it off as well, maybe as their way of paying them back? Or do
you think it's completely just for the countries who have not written it
off? I'm still trying to figure out why one country would forgive Iraq
of it's debt owed to them, and the other would not forgive them. Do you
think that some countries agree to, as you stated before "favors for oil
contracts", and others did not agree to it, which is why Iraq still
owes them money and would that mean that Iraq will not give "favors for
oil contracts" for those countries that did not forgive the debt owed to
them by Iraq? Sorry again for all the questions, i'm just thinking out
loud right now :)

I'm going to start letting people know about
what you have explained to me so they don't end up blowing all their
life savings! Thank you so much, again.

Answer :
Hi Angela, I honestly don't know how / what arrangements are there for
clearing Iraq's foreign debt simply because many countries barter over
it without cash all time. Eg, back in 2001, Russia offered Austria
MIG-29's instead of cash for relief of old Soviet debts to Vienna. A lot
of other stuff happens all the time over the world. There was a lot of
open speculation the USA and many countries were annulling Iraq's owed
debt to be seen as more favorable during the 2009 oil services contract
bidding. But much of that stuff is "realpolitik" rather than economic!
No problem, and thanks again for a great conversation!

Q8) Brian thanx for keeping it Real..And giving facts about whats to
come..But what do u think about people that are holding on the 50.00
Dinar notes without three zeros..??

Answer :
Hi Tony, when low denom notes are RD'd downwards and they end up at the
equivalent of $1 or less (fractional values), then often get issued as
new coins instead of new notes. Eg, when the 500,000 Lira banknote was
redenominated down by Turkey's 6-digit lop to 0.5 New Lira (50 New
Kuru's), it became a 50 New Kuru coin (Kuru is the Turkish equivalent of
"cent") instead. Basically, this note...
http://upload.wikimedia.org/wikipedia/commons/8/8e/500000_TL_obverse.jpg

...was replaced by this coin (both have the same value):-
http://upload.wikimedia.org/wikipedia/commons/7/7b/50kr_obverse.png

Q9) This all sounds wonderful, but here is my question. If the Iraqi
government has a budget of 82b dinar for 2011 (per Reuters) , how will
they put themselves in a place where they only have 29b total currency.
It just doesn't make sense. How will they be able to improve
infrastructure? Heck, how will they be able to pay their people?

Here is the link to the Reuters reference: http://mobile.reuters.com/article/idUSTRE71J1SP20110220?irpc=932

Answer :
How can they spend more money than they have in circulation? Because to a
large extent, they're spending $ not Dinars. Much of Iraq's spending
income isn't coming from internal taxes collected in Dinar's - it's
coming from a combination of foreign aid, the USA war budget /
"supplemental spending", and "petro-dollars". Most wages for Iraqi's,
etc, is in Dinars, but a lot of the expensive infrastructure projects
(which make up the bulk of the budget) is in "petro-dollars" : Iraq
sells oil to the US directly for $ (not Dinars) and will then spend much
of the same received $ back on employing US reconstruction, industrial
& defence contractors without a single Dinar changing hands in the
process. Also, that $82.6bn budget includes a $13.4bn deficit.

Same
is true of other "petro-dollar" countries. Eg, between 45-75% of Saudi
Arabia's government budget is technically $ paid by American oil
consumers and not Riyal's coming from domestic Saudi taxation. Only some
of these incoming $ are converted to Riyals, the rest are re-spent on
imported defence equipment, foodstuffs & agriculture, non-oil
related industries, transport & medical equipment, etc. This is how
much of the mid-East economic region works. Notice the article said
"budget" in dollars (what gets spent) and not "revenue" (where and in
whose currency the money actually comes from).

Q10) Brian's comments are not bullet proof. Here's why: The Iraqi government
has been removing the notes with 3 zeros from circulation since 2009. If
they were to LOP the currency then why remove the notes? LOP only
occurs when there is hyperinflation-check out the history. Iraq's
inflation is currently 7%. If you are worried about a LOP then open a
Warka account. Your money is electronic there-no exchange of notes-just
an adjustment to your net worth once the exchange rate becomes "on par"
with the USD, which by the way was a stipulation from the IMF to the
GOI. This is very real-not a pipe dream.

Answer :
Hi Gary. There's a great deal of misunderstanding with the removal of
high-denom notes. The Iraq govt isn't going around stealing them from
people and giving nothing in return, they're simply printing more lower
denom notes, ie, replacing 1x 25,000 note with 5x 5,000 notes. This
doesn't reduce the money supply in the way some pumpers claim it does.
Europe has done the same thing by withdrawing the 500 Euro note that was
targeted by counterfeiters - but it hasn't made the Euro value go up a
ridiculous 99,999%. The vast majority of denomination banknotes printed
in any currency are the lower commonly used notes. The highest
denominations usually make up just a fraction. As an example of the
Euro, there are only 56 million 500 Euro banknotes printed out of 6
billion total banknotes (approx 0.1%). Same is true of Iraq with the
25,000 notes. It simply doesn't make any difference as different
denomination banknotes don't get RD'd at different rates. It's one rate
for everything in the currency.

You also greatly misunderstand
what happens to bank accounts (all bank accounts in IQD currency) -
they'll be "lopped" too when the currency changes from IQD to the new
currency. ie, if you have an account with 1m IQD Dinar in it, it will be
RD'd down to whatever ratio the new currency is to the old (probably
1000:1 if they're lopping 3 digits), so you'll have 1,000 of the new
currency in it (but which is worth 1,000x more than the old so it won't
lose its $1,000 value). In no way shape or form will you turn $1k of
Dinar into $1m just by sticking it into a bank account during a lop no
matter who you bank with any more than sticking $1k's worth of Old
Turkish Lira into a bank will magically become $1bn after their 6-digit
lop.

If that were true, every man, woman and child living in Turkey must
all be secret billionaires! Bank deposits are converted at the exchange
rate of new for old currencies. They don't keep the same face value
(which is precisely why bank notes need to change in the first place -
nothing retains its face value after a lop which is the whole point of a
lop). There is no "one rule for notes, another for bank accounts". All
get lopped at the same rate. This is nothing new - it's happens dozens
of times before on every continent on Earth, and the rules for Iraq are
no exception just because it has a little oil or some confused /
dishonest pumpers say it is.

Also "LOP's only occur during
periods of hyperinflation" is another untrue "pumper myth". Most LOP's
occur *after* inflation has fallen after a period of chronic / hyper
inflation. No-one "lops" during high inflation because it doesn't boost
any confidence in the currency if prices continue to rise after the lop.
So the fact that inflation is falling in Iraq actually justifies a lop
even more.

Q11) Remember two things: Iraq has been removing the notes with 3 zeros from
circulation since 2009. If they were going to LOP why worry about the
removal of these notes so far in advance? 70% have been removed-reducing
the M2.

Also, note through history, including Turkey and the RV
of the lira, LOP's or devaluations only occur during times of high
inflation. Iraq's inflation has been kept low, typically under 5%-now
7%. That's why a LOP will not occur.

Answer :
"70% have been removed-reducing the M2."

Hi Gary. The above is
not true. That claim comes from someone confusing M0/M1 figures (only
banknotes in circulation) with M3 (total Dinar in circulation). That
claim is openly debunked in paragraph 7 of this article we're commenting
on itself : "Saleh said there are currently some 29 trillion dinars in
circulation in Iraq, represented by some 6 trillion banknotes of various
denominations." That 29t in circulation figure is just one week old. It
hasn't gone down at all - someone just compared "total money" to
"banknotes" and got confused.

It also says "most of them
[banknotes] are quite small" which means removing 25,000 won't make any
difference because they make up less than 1% of the 6tn Dinar in
circulation.

"Also, note through history, including Turkey and
the RV of the lira, LOP's or devaluations only occur during times of
high inflation."

Turkey didn't "RV" they redenominated. The two
things are completely economically different. A genuine "RV" is a peg
adjustment (like China "RV-ing" the Remminbi vs the $). Free floating
currencies cannot "RV" they can only appreciate. Iraq's inflation has
only recently fallen to 7% yes, but in prior years it was high. It's
this past inflation not current inflation, that lops take out.

Q12) First of 3
From the moment I’ve been in this investment even until
now, the debate of LOP versus RV has been raging. That very argument is
what drove me and thousands of others AWAY from Investors Iraq (IIF), as
it appeared it was absolutely overrun by those who felt it was their
mission to squash the hopes and dreams of other investors. I am sharing
this with the permission of those who have helped bring me this concept
to light, from several legitimate economists and very sharp minds, their
perspective to help each of you understand this dilemma.
I don’t
know about you, but I’ve been told time and again by those who are
absolutely in a position to know that this will NOT be a LOP, but will
be a straight-up RV, yet I found myself not being able to refute the
arguments of those who brought only “part of the truth” forward, using
the “numbers” to their advantage through logical focus on that which was
clearly understood. This post of mine is dedicated to explaining how an
RV will happen.
CONCEPT EXPLAINED:
First off, I’ll use the
exchange of a 10,000 IQD note as my example. To help explain the
economics of this cash-in example, I will use a 1:1 cash-in ratio
between the USD and IQD, that is given a two-tier payout, and a 2% bank
spread.
What You Will Receive:
If you were to cash in your 10,000
IQD note with a bank that charges you a 2% spread, you would personally
receive a net take-home of $9,800 credited to your bank account.
What Your Bank Will Receive:
Your
Bank will receive a $10,000 credit to its Federal Reserve Account. They
will also be able to add the $200 profit to their “capital account”.
If
you don’t understand the “Fractional Banking“ concept that runs our
country, you may want to, as that is what this is based on, and is what
is behind this entire concept and plan. To learn more about this
concept, I suggest you click HERE, and go to a video post I brought to
the forum previously, and posted in my “Tidbits“ section.
Ultimately, the bank wins because they are able to gain $2,000 in lending power under the 10% “Fractional Banking“ model.

What the US Treasury Will Receive:
First off, the US Treasury will
receive $3,500 in estimated taxes in the quarter after the exchange,
because you are now in the “rich” category and get to enjoy the 35% tax
bracket. This lowers the “net cost” of the IQD exchange to the US
financial system to $6,500 USD (i.e. $10,000 out – $3,500 in).
Furthermore, the US Treasury’s rate is higher than the banking rate (we
will use in this example 1.25), thereby further reducing their “net
cost” from $6,500 to $4,000.
Oil Now Enters the Picture:
At some
point, a Fed-appointed agent orders $12,500 worth of oil from Iraq.
Payment will consist of a $12,500 transfer from the Fed’s foreign
currency reserve IQD account to the IRAQ Oil payment account at the CBI
in a form otherwise known asPetroDollars/PetroDinar. Even though the
world spot price of oil is defined in terms of USD, the actual
transaction may take place in any internationally recognized currency
agreed to by the parties. For example, Iran only accepts Yen from Japan
for their oil orders, because they don’t want USD in their foreign
currency reserves.
How the CBI “RECAPTURES” the Money:
The $12,500
order is filled with 250 barrels of oil based on the spot price on the
date of the sale (for this example we used a $50 USD spot price). What
does it cost Iraq to produce the oil to fill this order? Well they have
negotiated productions agreements for approximately $1.50 USD/barrel.
From that price $.50 USD goes to the national Iraqi oil company who is
the partner in the field the oil came from. Out of the remaining $1.00
the other oil field partners have to pay the Iraq government a profit
tax of $.35 USD (35%). The net cost to Iraq to produce a barrel of oil
used in this scenario is $.65 USD. (i.e. $1.50 – .50 – .35)
What does
all that mean? It cost Iraq $162.50 to bring back a 10,000 IQD note!
Can they afford that? I think so! So, instead of paying out $12,500 for a
10,000 IQD note, they only pay $162.50! That doesn’t add to the money
supply much at all does it! They receive their IQD back and place it in
the CBI, or destroy it.
The transaction is completed with the Federal
Reserve exchanging foreign reserve credits which are equal to $12,500
USD (which had a net acquisition cost of $4,000 USD for the US) for 250
barrels of oil (which has a TOTAL COST to produce of $162.50 USD for
Iraq.
More completely explained, and simply put, it cost Iraq $162.50
USD from their foreign currency reserve accounts to redeem the value of
10,000 IQD, which goes into their operating accounts. At the same time
the US got $12,500 worth of oil for a net cost of $4,000. That’s how it
was originally planned for Iraq to RV at 1 IQD = 1 USD, with the
variable being the political element (i.e. UN Sanctions, GOI actions,
IMF actions, World Bank actions etc.)

3rd sectionOther Factors that Strengthen Iraq’s Position and Ability to RV:DFI
Funds Returned & Other Assets: $280+ Billion USD, plus other frozen
assets (estimated at $100 billion) will be returned back to Iraq and
added to their foreign currency reserve, bringing it up to $430+ billion
USD.CBI IQD Reserve Requirement Adjustment: The CBI will change the
current fractional IQD reserve requirements from 100% to 15% at the
appropriate time. As a result, the the total potential money supply will
be raised in value to $2.8 Trillion (430 billion/15), while at the same
time, the total physical IQD in circulation will be reduced by removing
the large bills with the 3 zeros over a period of 2 years, as they have
indicated.Oil Production Increased: Iraq will also execute the plan
they announced to increase oil production from 2+ million barrels/day
to 10 million barrels/day with the resulting revenues flowing directly
to the Iraq treasury.Oil Futures & Forex Contracts Added: To
further stir the pot, the CBI will continue to use it’s sales window to
market oil futures and forex contracts. They have shown they can
generate significant cash flow in the private market. Think of their
impact in public markets.There, my friends, is how this plan will be
enacted and made possible. Taking NOTHING, and turning it into
SOMETHING, then bringing it back to a “manageable and reasonable
something” that is accepted and supported by seeming endless supplies of
oil. This is how the world’s ENTIRE NEW MONETARY SYSTEM will be
regenerated and supported and backed, given, in essence, a re-birth and
renewed for most governments and economic regions… even by “Black Gold”.So,
here’s the summary for all the “players” involved, giving ballpark
numbers, and not taking into account superfluous costs, fees, and other
small details that don’t really affect the larger picture:Investor’s Net Gain: $10,000 – $200 = $9,800 x .65 = 6,370 for an investment that cost $10Bank’s Net Gain: $200 added to “capital account”, plus $2,000 they can use to loan out.US Treasury Net Gain: $2,500 from the .25 spread on top + $3,500 in quarterly taxes = $6,000CBI/GOI/Iraqi People Net Gain: $12,500 – $162.50 = $12,337.50 + Profits from “Other Factors”Overall Net Gain for All Involved: $6,370+$200+$6,000+12,337.20 =$24,907.20This is the wealth that was generated from a single 10,000 IQD note that was given an original value of approxi

Answer :
Hi Parkerro. The Iraq Central Bank have openly and repeatedly stated
they will redenominate - NOT "RV". Only pumpers invented a "Dinar RV"
rumor-mill. There's really no arguing with their intention anymore after
the clear April & June announcements to specifically "redenominate
based on Turkey". What's really happening is that some people have been
so desperately attached to being a promised millionaire just from
changing $1k of dollars into Dinars and back again that they won't even
look at what the ICB are saying anymore if it's not what they want to
hear because "the dream" (as you openly admit it is) is more important
to them than the truth. So they ignore it and cling onto failed pumper
conspiracies as to why the "RV hasn't happened yet". It's because there
isn't one and never has been outside of some chat rooms run by pumpers
who whip people up into an unhealthy state of despair and permanent
excited anticipation of a non-event. I understand your upset about
"squashing the hopes" of those who like to dream, but there are many
mature people out there who are more interested in the truth than just
dreaming, and it's morally wrong for dreamers to fool those who do want
to know the truth, just because they like to "dream".

As for your
posts : The ICB has no "100% fractional reserve requirement". Any
reserve at 100% is a full-reserve gold standard that's no longer
fractional. Last August Iraq's reserve req. was cut to 15% from 20%.
It's not at 100%. To be at 100% reserve for 29 Trillion, Iraq would need
60% of the entire $50tn global GDP. In reality they export just under
3% of the oil market which in turn makes up 6% of the global GDP. 3% of
6% = Iraq has approx 0.18% of the share of global GDP. It's surprising
to hear you talk about fractional reserve banking and fiat currencies
and then declare oil backs the Dinar. There is no oil backing it. It's
weak because it's overprinted. And currencies are not "RV'd" according
to oil futures at all. And the US Treasury won't receive any more from
taxes because $1k will not magically become $1m due to an RD in the
first place.

If anyone is in any doubt as to what will happen,
here are two of Iraq's recent announcements in plain English from the
people who are in charge of the whole process:-

April 13th 2011 -
"Iraq’s Central Bank announced on Tuesday that the project of Iraqi
Dinar re-denomination consisting of removing three zeroes is close to
completion. The re-denomination project is believed to be a strategic
plan that will be passed to the ministerial council and Parliament once
complete. Iraqi economists believe the re-denomination of Iraqi Dinar
will not have a major influence on the purchasing power of the Iraqi
Dinar which the government has hopes high on it."

June 24th 2011 -
"Iraq’s Central Bank announced on Thursday that it is planning to
delete the zeros from the Iraqi currency. The new currency will be
printed after deleting the zeros and will include the Kurdish language
in addition to the Arabic language. It will bear as well photos of
Iraq’s civilizations and patrimony in addition to symbols of Iraqi
intellectuals and figures”, Saleh noted. On June 19, Iraq’s Central Bank
Governor Sanan Al Shebeibi affirmed during the meeting of independent
commissions with Prime Minister Nuri Al Maliki that the bank is
preparing all requirements needed to replace the Iraqi Currency."

You
don't get new banknotes from an "RV" (which keeps the same notes), you
get it with a redenomination. Those x,000 notes you hold are going to
cease being legal tender and replaced with new x notes at a ratio of
probably 1000:1. There's really nothing to take out of context on the
above very clear announcements. The word "redenomination" (lop) was used
no less than 3 times in just the April 13th announcement alone. "RV"
has never been used by the ICB. It's only psychological denial and
"dreaming" out of fear of the truth that's keeping some people confused.

Answer :
Hi I watched it. A few points : The problem is that for some people
"doing a lot of research and getting to the bottom of it" is often just
looking for and agreeing with what they want to hear then twisting it to
fit what they think. The "law passed in Iraq saying people cannot say
anything bad about Iraq" is pretty silly. Many Arabic language Iraqi
newspapers openly criticize Iraq's economy all the time. Outside Iraq,
Iraq's laws don't apply. And on the net, they're ignored. There is no
real secret "news blackout on criticism". People in Iraq still without
reliable electricity after 8 years know what way the wind is blowing
with or without a media blackout. As do the 15-20% of unemployed
Iraqi's.

As for "after a lop, the value of a 1,000 Dinar bill
remains the same but the price of everything is 1,000x lower" - that's
total nonsense. A lop means deleting 3 zeroes off everything, both
prices - AND currency (both notes & bank accounts). You can't have
one without the other as doing so will be no different to printing
99,999% more money overnight (hyperinflation). If the Federal Reserve
printed $9.99 quadrillion ($9,990tn) overnight, would America be better
or worse? It's the same thing - a 1,000x fold increase in money supply
relative to prices. There's nothing new about this - it's been done
dozens of times before:-
http://en.wikipedia.org/wiki/Denomination_%28currency%29#List_of_currency_redenominations

A
"lop", "cutting zeroes", "lifting zeroes", etc, are all slang for the
same thing : a redenomination. If 3 zeroes are cut / lopped, then people
will be given 25 Dinar notes for current 25,000 notes, prices will fall
by 1,000 (ie, average rent in Iraq will fall from 250,000 to 250), bank
accounts adjusted by same 1000:1 factor, and doing so will raise the
value of the currency by same rate 1170:1 to 1.170:1. The same
multiplier factor is used right across the board, and cannot work any
other way. People don't get 1,000x richer from lops, nor can they buy
1,000x more goods afterwards. After the lop, the Dinar may (probably
will) appreciate gradually if and when it's Dinar economy (which doesn't
include selling oil for $, nor does it include just finding oil which
won't be drilled for another 5-10 years).

A lot of these people
really need to stop posting confusing videos until they understand
what's what. The blow excellent PDF (click the download button) explains
the entire lop process in detail (especially the "redenomination
history" on the last page):-

Q14) Brian your awesome! I love to read your post do you have a website?

Got
a good one for you the puppers are saying if they drop the 3 "0"'s this
is one of many FUNNY examples is you go to the store in Iraq with a
25000.00 note to buy something for 25.00 that use to cost 25000. They
will give you change on the 25000 yes he said change of 24,975.00 the
store keepers would have to have a room stocked of dinar.

I almost fell of my chair when I heard this one sadly enough people believed this?

Answer :
Hi Car (of Canada). Yes I know what you mean! No I don't have a website
(though some pumpers do drive me to start considering writing a "plain
English" page of what a redenomination is)! There's nothing wrong with
buying a small amount of FX currency as a first-time experiment if
people treat it as an equivalent of a lottery ticket and they use their
common sense as to realistic expected gains, understand what a "fiat"
currency is (and why they aren't backed by anything) and just as
importantly - "keep it real" regarding how much time / effort they spend
monitoring it after they've purchased (enough to understand it but not
to being a daily obsession like the Dinar is for many people). What is
wrong is when people panic buy hundreds / thousands of dollars of Dinar
which have ceased trading on the international market on the back of a
promise of being a millionaire from a group of faceless secrecy-addicted
chat room strangers who permanently speak & write in a deliberately
misleading over-excited style to make it sound "imminent" to put
pressure on people to impulse / panic buy.

I personally know one
elderly couple who lost their home because of the Dinar ("It'll RV next
week, so buy more now! Quick!!! Just $300 dollars will be an extra
$300,000 next Monday!!!" - every single day since 2006 from some
pumpers). No serious Forex advisor would ever do that. Increasing
numbers of others are literally making themselves ill spending all day
every day, desperately trawling dozens of Dinar forums being whipped up
into a frenzy by pumpers posing as "secret intelligence collectors" who
keep followers on an emotional roller-coaster ride cycling between
frantic despair and unhealthy almost rapturous anticipation day after
day, month after month, year after year (and yet not only can they not
get anything right in 5 years despite throwing daily predictions around
like confetti but some days are outrightly contradicted by the Iraq
Central Bank and have to scrabble around inventing a new "secret"
conspiracy to keep the illusion alive, or twist meanings like "a
redenomination is not a lop" (and thus contradicting their advice in
past months) when they can no longer claim Iraq will not redenominate).

Many,
many of these people are just posers and drama queens being paid
commission from every Dinar sale they refer (some are also paid
commission from offshore financial services for referring and selling
offshore accounts to put their "future millions"). Some of them don't
even attempt to hide it : if you order your Dinar through Dinar Trade
and mention you were referred by Dinar Daddy, you will get a discount.
Another long-term Dinar pumper named "Phoenix" also uses the names
SekretKey, Ranger77, and Ema266 to pump dinar on many different sites.
He also used to pump penny stocks under the Ema266 name. Many people are
beginning to understand that these people's profit is not getting rich
from *holding* Dinar, it's getting rich from getting rid of them before
the RD! Have a good weekend!

Q15) Could someone explain to me what my 25000 note is worth in the U.S. Should I hang on to it or take it to the bank?

Answer :
Hi Tracy, your 25,000 Dinar note is worth about $21.45. Most banks won't
change up Dinar at the moment as it isn't being internationally traded.
Most Internet Dinar sellers also won't buy them back (and some offer
such ripoff rates it isn't worth it). One other option could be to find
someone going out to Iraq (in the Armed Forces maybe) and swap it for a
$20 note?

Q16) Hello Brian. This is just absolutely false. Although the exchange rate
you posted for the 25k note may be close, most of the banks that sold
the IQD will also buy it back today.
I have purchased all my notes
from my banker. And whatever happens, they have a buy back rate to buy
it back today. Yes there is a spread and I will lose a little. But
there are others who have had their Dinar longer than me that bought
years ago. They could sell today and realize a profit...today.
Although some banks don't sell anymore because of difficulty in getting
it...they do buy it back.

You obviously have a lot of information
about trading the Forex...I don't think you understand fractional
banking totally. I wont restate the argument already made...but that's
they way IT WILL happen. There are pumpers out there and I agree they
have ill motives...but that doesn't make the investment a bogus one.
Your
response was not adequate to make me change my opinion of this
speculative investment. I understood the risk going in...that's why the
possible return is higher. More risk...more return.

Your basic
answer to fractional banking and the RV was that Iraq has mention
redenom not and not RV. Do you honestly think they will "announce that
they will RV?" No they won't! Most people including you and many other
currency traders and speculative investors and even foreign Country's
around the world would buy as much as possible and wait for the RV.
Before
Kuwait Rvd they said as close as the week before they did it that they
were not going to Rv. And they did it the same week!

I agree there
are pumpers out there but there is a lot more going on that you don't
see, such as banks carrying more cash on hand, training tellers on IQD
and currency exchange, contractors in Iraq with contract rates of over
the 1170 rate posted at CBI signed and waiting for the RV. There is so
much more than the facts that you know about. There are other facts on
the table such as when Shabbi was in Washington a few weeks ago talking
to business men about investing in the future of Iraq. (you tube it)
Shabbi was asked when pint blank...when would the Revaluation happen.
He said if he knew , he certainly couldn't tell it and laughed it off!
If they didn't 't have revaluation in the plans, he would have said so
when asked. I just think you are missing too many other details other
than the ones you have.

Answer :
The FX rate for the Dinar isn't secret and is openly and visibly 1,168.50:1. So 25,000 Dinar = $21.39:-
http://www.xe.com/ucc/convert/?Amount=25000&From=IQD&To=USD

Pumpers
FX rates are far worse (>1400:1) when buying back at market rate
(and >1800:1 with rip-off selling spreads). Many Dinar sellers don't
buy back, and others have secretive priceless contact forms with "Your
submission of this form does not obligate The Currency Vault to purchase
your currency notes from you" disclaimers.

Let me clarify : the
Iraq Dinar is not being openly traded on the Forex. Some places may buy
back sure - many soldiers, contractors, etc heading to Iraq, buy them
like that. But they don't *have* to buy them back the same way a FX
outlet has to change say Euro's to $ and they can withdraw that at any
time. It also doesn't mean they'll be able to do so during the RD if
Iraq installs currency controls on money heading in / out of Iraq (which
is exactly what they did last time in 2003).

"Do you honestly think they will "announce that they will RV?" No they won't!"

Sorry
twash, but all this "secret society" nonsense is getting old. Iraq have
already announced they will "RD based on Turkey" and openly described
their new banknotes in detail (the banknotes that most "secret society"
Dinar pumpers swore blind wouldn't happen because new notes = a lop) and
are now scrabbling round like headless chickens trying to invent
plausible sounding conspiracies to avoid admitting their deception. The
only people who use "RV" are the pumpers who fail miserably at getting
*anything* right, week after week, year after year. You cannot reprice
everything & every bank account in the nation *and* change all
banknotes and related logistics (ATM's, banknote counting machines, etc)
in secrecy all in the space of 24hrs. That's complete nonsense that
stretches gullibility to the limits. The only reason the pumpers are
pumping this secrecy stuff is to create excuses to keep the "RV"
illusion alive now that they're being overtly contradicted by the ICB on
an almost daily basis. They've switched from plausibility to paranoia
& propaganda tactics called "appeal to authority" : "I have secret
intel contacts, therefore do not question me because everyone else is
wrong" is what 99% of pumpers come out with every day. And it's utter
claptrap.

"Most people" aren't buying Dinar at all anymore than
they were the Bolivar or Lira. Nor are most countries. "Countries are
hoarding Dinars" is yet another lie churned out by the drama queens and
posers on Dinar rumor forums with nothing to back it up - and plenty to
disprove it. Statistics are widely available on this pumper myth:-
http://www.imf.org/external/np/sta/cofer/eng/cofer.pdf

Also,
in his Washington speech, Shabibi's exact words were : "I think, ah… to
bring back the Iraqi Dinar, where to actually, the three zeros have to
be removed". Again : "remove zeroes" = lop (about the 5th time he's said
it now). He also spent most of the speech talking about inflation. He
said he didn't know because he doesn't - one prior requisite given was a
pre-RD educational programme for Iraqi's on the new currency (which
shatters the "it will be done in secret" pumper BS).

Also Kuwait
had a pre-existing hard peg. The Iraq Dinar doesn't and geniunely is a
lot more like Venezuela & Turkey in terms of being low market priced
currency after high inflation. Iraq is in a totally different situation
to Kuwait. Thanks.

Q17) Hey Brian take a look/listen to this video for the BH Goup posted on Sunday July 3/11
http://www.breitlingcurrency.blogspot.com/

And for the newbies
Dealers

www.msb.gov
Money
services businesses generally are required to register with FinCEN, to
establish anti-money laundering programs, and to comply with
recordkeeping and reporting requirements under the Bank Secrecy Act.
Dinar sales websites frequently claim that their businesses are
registered with the Department of the Treasury. These assertions are not
always accurate. Further, it may be diffi- cult to discern from the
money services business registration list on FinCEN’s website
(www.msb.gov) whether the business is in fact registered, particularly
if the business is an affiliate of, or a “doing business as” alias for,
the business that is registered. Moreover, even if the business is
registered with FinCEN, that registration does not guarantee that the
business is in compliance with other Bank Secrecy Act requirements or
with applicable state law. For these reasons, a financial institution
that conducts business with entities selling Iraqi dinars should conduct
appropriate due diligence to assure itself of the legitimacy of such
entities. All financial institutions that do business with, and
potential customers of, such money services businesses, are reminded
that registration with FinCEN in no way authenticates either the
legitimacy of a business, or the compliance of the business with any
federal, state, or local laws.

And to see the legal action that has taken place with these dealers better know as puppers
http://www.iraqidinarmoney.com/dinartrade/comment-page-1/#comment-36

While your on this siteabove you can look up other dealers

Answer :
Hey Car, yes I know about that. A lot of people don't understand that
you do have to be licensed to trade in foreign currency beyond just
selling on a few unwanted vacation notes on Ebay. EDinarFinancial has
also violated that and and on the same day just a few weeks ago, the
Arkansas Securities Commission issued a similar Cease and Desist Order:-
http://www.iraqidinarmoney.com/edinarfinancial/

The
profits mentioned are also interesting : "From on or about January 1,
2008, through the date of this Order, Dinar Trade has exchanged
approximately $4,400,000.00 into Iraqi dinars in approximately 5,000
transactions for residents of the State of Arkansas."

$4.4m just
from the state of Arkansas (pop 3m)? That's works out to average $454m
total money received for 310m US pop. And people wonder why they pump
like they do...

Q18) Brian, the CBI sells this worthless currency to banks, foreign
investors, they now have made billions, for their international reserves
and are ready to become a stronger country and currency.

This is
suppose to be a World wide Historic event, and like your saying about
other currencies that go up or down in value and those countries have
good resources too, that this iraqi currency is no different. This is
where I think you are wrong. Why do so many millionaires, Governments
all over the world have so much dinar if it is a worthless investment.

Along
with tax attorney's , dinar sites, and all the other people getting a
kick back from this investment, they have already made some money. Yes ,
every investor has been given the tip, " Only invest in what you can
afford to lose" then there are the investors who are totally
brainwashed, quit their job, 24/7 on computer waiting for big day, sold
everything to get more dinar. Hey , those are the ones who would invest
in a bunch of other things, if not the dinar. It is so easy to get
fooled by people , they make it seem so real.

IMO I think this is
50% about Iraq and 50% to help all the other Governments and their
countries around the world. I think we are waiting on some currency tax
law world wide or per country. Then Poof , RV of many currencies, but
the iraqi dinar will be worth the investment at least revalues to one
dollar per dinar as now , not worth a penny, so still one dollar would
be a good return, and would be easy to control.

This will be an
Historic Event, so that is why this is different. Economically the
World needs this. We will have a Great Blessing Brian, and hopefully it
will change lives for the better. God Bless you and maybe you should
buy a little , just in case making sense , at the end makes no sense at
all, and you miss the Big Historic Day. Take care Theresa

Answer :
Theresa, as I posted in my link to the IMF, countries don't have that
much Dinar at all. It's a complete myth that they've been buying and
hoarding it in vast quantities. If any country can just declare itself
1,000x richer, well, so can all those other countries! Maybe 6 other
countries could "RV" after Iraq and you could invest one straight after
the other - that way you'll be a Septillionaire! Maybe 150 countries
could "RV" and you could be a Quinquagintacentillionaire! All of a
sudden, reality starts to implode when you realize claimed "RV" in the
way Dinar holders dream of is just printing money and pretending it's
"different" because they want it to be! A real "RV" is a peg adjustment
and no new banknotes are involved with that.

It's also rather
meaningless to say "Iraq won't say they'll RV because it'll be like
insider trading" if everyone already apparently "knows" the
"super-ultra-secret" that it'll supposedly go up by 99,999% overnight
given the amount of Internet pumper-chat-room hype. Do people really
believe that Forex pros and much of the educated general public are
sitting there scratching their heads not "getting it"? The real reason
they've said it won't "RV" is quite simply because it won't - it'll "RD"
instead. And I'll repeat it again : You cannot "print yourself richer"
with fiat currencies. Not now, not ever.

"IMO I think this is 50% about Iraq and 50% to help all the other Governments and their countries around the world."

Iraq
creating 99,999% more money overnight without selling a single drop
more oil will *NOT* make either Iraq or the world richer, any more than
Zimbabwe or WW2 Germany made it richer, it'll just export chronic
inflation. $1,300 loaves of bread? No thanks! The world "saved" by a
war-torn country with 15% unemployment, 12hr per day electricity supply
and 0.18% of global GDP share? Keep it real people.

Ask yourself these common sense questions:-

1.
If everyone ran out tomorrow and bought $1k worth of Dinar with the
$10tn of US notes in circulation, where do you think the $10quadrillion
would come from to give everyone $1m back other than printing it? Where
do you think this 99,999% increased money supply falls into existence
from?

2. The average Iraqi earns $2k-4k in Dinars. Do you
seriously believe they'll be given $2-4m each year for sweeping the
streets, and will be able to sell their old 1990's Toyotas for $5-10m
and their 3rd-world houses for $50-75m each after the RD by changing up
Dinars for $? Some of this stuff is bordering on insanity.

3. The
total global GDP is approx $60tn of which Iraq's share is 0.18%. If
that 0.18% is supposedly "magic" enough to sustain a $29tn Iraq money
supply whilst the other $30tn is shared by 99.82% of the rest of the
planet then by extension, you must also believe everyone else on the
planet can magic $16 quadrillion into existence via similar "RV's"
including Obama who can magic $4qdrn and will hand out $13m to every
American all without inflation?

4. If Iraq's 0.18% is enough to
sustain $29tn money, then by extension, the $60tn total global GDP can
be substituted for just 0.37% GDP. Or in other words, everyone can just
stop working, buying and selling, and constantly "RV" (print) themselves
money and no inflation will occur anywhere because everyone on Earth
will be a retired millionaire...

The sad truth is, some people
are so brainwashed by this "millionaire for nothing" stuff, that when
the RD does take place, they won't even understand it then and will just
angrily shout at the exchange cashier they've had $999,000 promised
money "stolen" by Iraq when they change their original $1k worth of
Dinars back into $1k. Seriously people, if you truly believe the more
money you print, the more value each note has and that printing enough
for $1m each will make everyone rich with no other negative effect, then
I have some magic beans to sell you...

Q19) Thank God for you and your ability to explain it in fairly plain terms.
I hope people read your comments and actually have the courage to
listen to the truth.

Answer :
Thanks very much for your kind comments. Really, Forex is a "zero sum
game" - when you buy currency at a rate, someone else has to sell it at
same rate - and vice versa : when you sell currency, someone else has to
buy it at same rate. All this talk of "everyone's a winner from an RV"
really is uneducated nonsense. If the Dinar "RV'd" without any RD / lop,
then Iraq would have to monetize $25bn (29 Trillion Dinar at 1170) into
$25tn (29 Trillion Dinar at 1.170) worth of overprinted currency - or
in other words, it would have magically create $24.975tn overnight from
nothing causing massive hyperinflation. Contrary to popular belief, oil
reserves don't massively affect currency values at all - it's only oil
production sold in native currency that does that. Oil is only worth
something on a currency level when you sell it as you can't sell the
same oil twice - (once when you find it and once when you actually sell
it) any more than other countries can sell the same oil, food,
electronics, etc, twice.

My above question has gone not only
unanswered here but everywhere else even on the most educated pro-RV
Dinar forums : If there are only $10tn US Dollars in circulation and if
everyone bought Dinar and magically became 1,000x richer, then where
does the other $990tn come from to give them "their" $10qdrn back? Even
if as little as $2bn were gambled on the Dinar, a 1,000x increase in
value means that even if 309.9m Americans gave the other 100,000 Dinar
holding Americans every $ banknote in circulation - there still wouldn't
be enough (total USA M1 figure (banknotes in circulation) from March
2011 is only $1.9tn)! This is why the whole "RV" thing the way some use
it is mathematically impossible. A true "revaluation" is simply moving a
currency peg. China "RV'd" a while ago. That's what a real "RV" is.

Almost
every serious site out there is saying the same thing about Iraq will
RD / lop. The Iraq Central Bank said it 5 times over (including in
Washington). Serious Forex sites are saying it:-

"In 2010, the
Central Bank of Iraq announced their plans to redenominate the Iraqi
Dinar to ease cash transactions. The intention would be to drop three
zeros from the nominal value of bank notes; but the actual value of the
dinar would remain unchanged. That would mean that 1,000 IQD
(pre-redenomination) and 1 dinar (post-redenomination) would both be
worth the same amount in US Dollars. Although the announcement stated
that the change would take place by the end of 2010, there has been no
redenomination as of January 2011 and no further announcements have been
made."
http://www.xe.com/currency/iqd-iraqi-dinar

And serious
Iraq investment boards (those looking to long-term invest in Iraqi
companies rather than Dinar gambling) are saying it too:-

"At the
end of last month, a spokesman for the Central Bank of Iraq (CBI) told
reporters that a plan to redenominate the Iraqi dinar will be presented
to the Council of Ministers in the near future. The Council is then
expected to submit the relevant legislation to Parliament for a vote. If
the lawmakers approve the project, all existing banknotes will be
replaced with new currency at the rate of 1,000 old dinar for one new
over some unspecified period of time."
http://www.iraq-businessnews.com/2011/07/05/new-dinars-for-old/

I
can only end my post by saying : To the "RV" crowd, the Dinar is more
an emotional investment (like "Tulip Mania") than an economic one.
People aren't buying because they've sat down and done the impossible
maths - they're buying because others encourage them to "not miss out",
who in turn are encouraged by others who say the same thing, all in a
chain leading back to the pumpers who make their money not holding Dinar
- but from getting rid of them!

Q20) Thanks for your posting. You have really helped to educate a lot of
people on the IQD and shut down a lot of rumors. Here is my question to
you. Do you believe that it's a good idea to open a bank account in
Iraqi and just putting my Dinar in that account? I have been thinking
about for some time now. Thanks.

Answer :
Hi Julian. I really don't know what advice to give you. Opening a bank
account in Iraq won't make any difference in $ value vs holding the same
Dinar in physical notes even after an RD / lop as bank accounts and
notes get lopped at the same ratio. It may make it easier to exchange
from Dinars back to $ if American outlets do not do so during an RD due
to imposed currency controls, but there may still be imposed controls on
wired-money out of Iraq during the RD. If you do, then do be careful,
as there are a lot of shady "3rd-party proxy" firms who claim to do it
for you, who I wouldn't let anywhere near my bank account details!

The
real issue there is security : If you look on the CBI's website at the
list of "Financial Companies", even many official listed ones are using
hotmail, gmail and yahoo accounts for supposedly private email contact
which doesn't exactly inspire confidence! Many Iraqi banks also do
transactions via wide-open unencrypted email which leaves the door wide
open to ID theft. The Internet works by sending packets through a series
of nodes and your data could pass through as many as 20 other computers
between your end and Iraq's. Personally, I wouldn't as their
infrastructure is just too immature at the moment in terms of overall
transaction security. In fact, these days I wouldn't even use a domestic
US bank which requires you to use unencrypted e-mail for transactions,
let alone international accounts.

As for traveling to Iraq,
reading both the Travel Advisory and Travel Warning is still required
both for security advice (carjackings are rife, avoid crowds, foreigners
still targeted by kidnappers, etc) and knowledge of Iraq's many rules
and regulations (visa's, currency limits, etc):-
http://travel.state.gov/travel/cis_pa_tw/cis/cis_1144.html
http://travel.state.gov/travel/cis_pa_tw/tw/tw_5429.html

This
includes the Special Circumstances : "Iraqi law prohibits adult Iraqis
and foreigners from holding and transporting more than 10,000 USD in
cash out of Iraq. Iraqi customs personnel are taking action to enforce
these laws and may pose related questions to travelers during
immigration and customs exit procedures. All U.S. citizens are reminded
that it is their duty to respect Iraqi laws, including legal
restrictions on the transfer of currency outside Iraq. If you are
detained at the airport or at any other point of exit regarding your
attempt to transfer currency out of Iraq, you should contact, or ask
that Iraqi authorities immediately contact, the U.S. Embassy. Please be
aware that large wire transfers may require Central Bank of Iraq
approval due to measures in place to combat money laundering."

Q21) The researched information provided by many is well appreciated. I have
1 comment in reference to the IQD's redenomination/revaluation. As
Angela mentioned; in order to print lower denomination dinar the value
has to increase period. If not, the Iraqi people would have to carry
truck loads of money to purchase goods (it was also mentioned prices
will go down by the thousands). Does any remember the $1000 notes &
$10,000 notes (usd)? When we did away with printing those and they
were removed from circulation, did those notes some how become $1 and
$10 notes?

Now, if someone has one of those notes laying around, would
it not be worth $1000 or $10,000 when deposited into a bank account.
The 3 zeros have to go because the IQD will RI or RV and large notes
will no longer be needed in the country of Iraq as Angela explained the
merchants with truck loads of money to give change. Investors who have
purchased 25K notes will have 25K to cash in/out, it will not be 25
dinar; the triple 0 notes will be removed from circulation ~ although
the UST will collect those notes for purchasing of oil.

Answer :
Not necessarily. It's entirely possible with a redenomination or "lop",
to take a lot of inflation out by deleting zeroes without the relative
value of the currency to appreciate / depreciate. That's actually what
the Iraq Central Bank want - to get rid of the zeroes and have a stable
currency that isn't of a radically higher value because due to being a
net exporter (like China), Iraq actually benefit from having a weaker
currency.

The high denomination US notes you mention : $500
(William McKinley) / $1,000 (Grover Cleveland) / $5,000 (James Madison) /
$10,000 (Salmon P. Chase) and $100,000 (Woodrow Wilson) were for
inter-bank transactions back in the pre-electronic gold-age era (before
money was "wired" between banks and being more portable for daily /
weekly transit than gold). They've long been out of circulation and have
been discontinued since July 14 1969. There are only 336 $10k notes
still existing - and most of them are owned by numismatists (rare coin
& note collectors) traded on their numismatic value rather than $10k
face value. The massively printed 10,000 Dinar notes due to inflation
aren't the same thing at all and will certainly be demonetized after the
new bank-notes were introduced after a set period (3 months during last
Iraqi bank note change). US $10k notes didn't become $10 notes because
America didn't RD / RI or "lop". These notes were introduced
specifically for bank transactions, not for general public circulation
in response to the price of a loaf of bread increasing to $1,000 (which
is exactly what happened in Iraq...) They were used more like bonds than
bank-notes.

"Investors who have purchased 25K notes will have
25K to cash in/out, it will not be 25 dinar; the triple 0 notes will be
removed from circulation"

*ALL* current NID banknotes will be
completely taken out of circulation and replaced with new designs across
the board (dual Arabic & Kurdish writing) - not just the 000 notes
but ALL of the lower denoms too due to the new designs which will be
universal on all new notes. It's a complete myth that current
lower-denoms will be kept "as is" or that they'll leap up 1,000x in
value (that's like saying 5 cents and $50 should have the same value!).

The
current 1,000, 5,000, 10,000 and 25,000 Dinars will probably be
replaced with 1, 5, 10 and 25 (or 20 as in 5x 20 notes for each 4x old
25k). New 50 / 100 Dinar (50k / 100k current note equivalent) notes may
be introduced at the new value to fulfill a high-value circulation note
gap. And many of the current lower denom notes 50 / 250 / 500 Dinars
will probably be replaced with sub-unit coins, ie, the equivalent of 5,
25 (or 20) and 50 cents (as happened in Turkey and 50 other countries
who've gone through the same thing).

Q22) Just got word the IRS has opened two offices in Iraq...makes me think
some people are going to make some $ and they want their cut...Contrary
to what the general outlook on this forum is I believe there is some
serious $ to be made with the RD/RV.

Answer :
The "IRS setting up in Iraq" rumor started by "pied piper" King Pumper
"Okie" is false. It's just yet another lie told on the back of 1,000
prior ones, including:-

"[OKIE_OIL_MAN] THE 27TH STILL LOOKS LIKE AN OPTIMUM TIME BUT IT MAY OCCUR PREVIOUS TO THAT" - March 22nd 2011

"[OKIE_OIL_MAN]
will occur at any time from now thru tomorrow evening our time. no need
for further calls–all is settled and done" - Feb 13th 2011

"[OKIE_OIL_MAN]
more confirmation coming in from many sources–looks like monday will be
a day that will be really busy if your a banker. you guys–screw your
heads on straight–monday will probably be the 1st opportunity to cash
in—-geeeessssshhhh. its all done–what more is to be said. he filled the
positions yesterday. everything done yesterday" - Feb 3rd 2011

"[OKIE_OIL_MAN]
Hearing no later than Wednesday or Thursday. signed off on RV yesterday
Shabibi ordered to Parliment meeting today we are 48 hrs. oil
production goes into affect on Feb 2.. has to happen before then This
source is very very good..." - Jan 31st 2011

The same fake,
debunked and failed "intel" recycled over and over to keep people hooked
into an excitable state of impulse buying "just a few more last minute"
Dinars from his salesmen bosses...

Q23) Brian, you're one of the few that make sense....and common sense. A
while back, someone posted about the secrecy of purchasing IRD and
making it sound like a *religious* venture for a *selected few*. I
think the only people that don't want it unknown are the *posers and
drama queens* whom I'm beginning to wonder if they're all the same
person. Another reason for the secrecy is that scams are simply not
promoted. I have to admit that I bought some a while back hoping for an
RV.

Now, I believe dropping the 3 zeros will bring it back closer to
my intial investment but I plan on leaving it in Dinar and hoping for
their economic recovery possibly doubling my money plus intial fees if
it gradually becomes worth more towards the 3+ they talk about hopefully
within a few years. A friend once said that when he was in the Vietnam
war that over night the government declared their currency worthless
and printed all new denoms. Everyone lost. Brian, is this possible
with the Dinar? Can they or will they just declare it worthless?

Answer :
Hi Rich, I don't think Iraq will just instantly declare their currency
worthless. They've already said they'll change old for new notes, the
only "sticky" issue for non-Iraqis is whether people will have to travel
to Iraq to change them up. This is what happened the last time they
changed bank-notes back in 2003 during the 3-month time limit for the
changeover (Oct 15 2003 to Jan 15 2004). No-one will become millionaires
from a lop, and they'll retain their value overall short-term and
probably appreciate slowly long-term, but I do hope people who bought
them can change them back / into new post-RD Dinars without getting
ripped off by outrageous scamster trading fees (some want up to an
eye-watering 40-80% spread!)

As for the "religious venture for a
selected few" I agree that's what some people on some forums have turned
it into. Some are hugely egotistical, eg, "I won't rub it in too much
when I get my 12 Porsche's" and "I'm practicing my 'millionaire look'".
Oh, boy!... I've seen one forum where people were hounded, censored and
banned simply for posting recent Central Bank of Iraq statements saying
"redenomination". A lot of it stems from fear and panic.

As you
say, common sense dictates the Iraq Central Bank will inform the Iraqi
people openly before it happens, and Shabibi openly stated in his
Washington speech that before *anything* happens, and before any "hard
date" is set / can be given, there will be a large-scale educational
campaign in Iraq for Iraqis. In my opinion, much of this secrecy stuff
came about when the pumpers who previously were riding off the back of
"it could go either way" (RV vs lop) ambiguous silence were started to
be openly contradicted and discredited by Iraqi Central Bank statements
when they started affirming "lop", so they invented and try to maintain a
paranoid conspiracy where pumpers were secret agents with "secret
intel" and anyone who disagreed was "compromised" (basically "shoot the
messenger" and "turnspeak" propaganda tactics).

Much of this is blatant
nonsense, as all prices, bank accounts, bank notes, ATM's, bank-note
counting machines, etc, in the country will have to be adjusted to
remove the zeroes which simply can't be done in secret. Anyone who says
Iraqis won't be told in advance / will be the last to know is a
scamster. Hope things work out for you long-term Rich!

Q24) Hi Brian, Hate to be late to the party but I just found out about this
Dinar craze yesterday from a friend who wants me to buy millions of
Dinar so I can be a billionaire just like they're going to be. I'm
wondering how I could not have known about this? I mean have I been
living in a cave? I watch CNBC and read the Wall Street Journal and
never heard anything about it. So I started investigating and ran into
this thread with your comments. WOW!! What a treatise on economies and
currency trading. Incredible stuff!! I'm not saying I would've bought
but I was sorely tempted and you lectured me out of it. Thanks!! Is
there anyway you can hop over to this dinarvets.com site and chat some
sense into these kool-aid drinking dinar wackos? It would be very
entertaining to see them wilt before your intellectual prowess.

Answer :
Hi Jack, thanks for your comments! Don't worry, you haven't been living
in a cave! The reason the WSJ, CNBC, FT, etc, don't carry it is because
the way the pumpers are blatantly mis-selling it is basically fraud.
They can get away with it by hiring people to "pump" with anonymous
usernames like "OkieOilMan" and "Phoenix" and keeping it small scale,
but professional economics publications could face lawsuits if they
started mis-selling it in the same way. In short, a lot of pumpers don't
want it to make the TV news as there'd be massive calls for an
investigation into mis-selling if it did. There's no real difference
between what these guys do (sell Dinar on the back of fake intel their
pumper friends invent in return for a cut of the sales) and insider
trading / stock price fixing / "pump and dump" of the same thing in the
stock market.

As for posting on Dinar forums, a lot of people
have tried that only to met with censorship both direct (deletion of
posts) and indirect (people shouting down / spamming / abusing
"dissenters" / closing topic discussions). On the dinarvets forum, it
says "Lop talk is not allowed in chat". Given that the Iraq Central Bank
are openly talking about redenomination (lop), this results in the
absurd situation where no-one can talk about official Iraq Central Bank
statements about the Dinar on the dinarvets forum because the truth
makes them feel uncomfortable as it openly contradicts what pumpers and
scamsters have been shoveling out over the past couple of years! Really,
DV is a site for those who can post anything they want on the Dinar -
as long as you agree with the pumpers (ie, a "shill site"!)

A lot of
people who post there long-term have shut down their minds to anything
that doesn't include making them a millionaire just from changing up
$1,000 into Dinars and back, and aren't interested in genuine debate -
just conformity. Instead I prefer to post the truth on forums like this
where people can honestly debate the issue from both sides without the
thinly veiled censorship that's rife on many "RV" forums. Thanks for
your comments, and thanks also to rferl.org for allowing a much needed
honest debate on this issue!

Q24) I have enjoyed reading your comments and have tried to explain many of
the same things to my family members. Unfortunately, they have
continued to buy the Dinar. As a matter of fact, a couple weeks ago
they were told it was close to RV by a 'source' so they have gone out to
buy more.

Anyhow, I was doing more ‘research’ to try and show
them the errors of their ways when I came across this article from Greg
McCoach. In the article he mentions the follow:
- The U.S. Government is the Largest Holder of Iraqi Dinar Outside of Iraq

- Experts speculate the U.S. government received nearly 4 trillion Iraqi dinars at an exchange rate of 4,000 dinar to USD1.

-
About two months ago, Iraqi dinars could no longer be purchased; the
recent Dodd Frank bill appears to have legislation related to the
revaluation of a foreign currency and preventing mass hysteria.

-If
this is even close to true — and the UN allows Iraq to revalue their
currency up to USD1: one Iraqi dinar — the U.S. government would stand
to profit in trillions... as would anyone else who speculated on the
dinar over the years.

I
don't know much about Greg but he doesn't appear to be a Dinar pumper.
He actually seems to be a legitimate source of investment advice in the
precious metals arena. I am curious as to your thoughts about his
comments.

Answer :
Hi Paul, in response to the article you quoted : First up, "The dinar
collapsed after the United States invaded Iraq and toppled Saddam. Prior
to U.S. invasion, the Iraqi currency was trading over USD3 to one Iraqi
Dinar on the strength of the country's massive oil industry" is
factually incorrect. The Dinar collapsed long before the US invaded Iraq
due to Saddam printing massive amounts of it under UN sanctions. It was
still over 1200:1 even back in May 1997. It wasn't the US invasion that
caused it to collapse but rampant chronic self-inflicted 1990's
inflation.

The Iraqi Dinar was introduced in 1932 replacing the
Indian rupee (used due to British occupation in WW1) at a rate of 1
Dinar per 13.5 rupees. It was pegged par the British £ then the peg was
switched to the US$ at a rate of 1 Dinar = $2.8. In the 1970's, the
Dinar rose to 1 Dinar = 3.3778 which remained until the Gulf War. This
peg value was mostly artificial, evidence of which lies in the fact the
black market rate was 6x higher ($1 = 3 Dinars) meaning no-one was
willing to pay it's 1:3 *over-valued* arbitrary peg in reality even with
Iraq's oil industry in full flow. This value was using what are called
"Swiss Dinars" (due to Swiss printing plates used) and they were
relatively strong vs the $ because they weren't overprinted.

After
sanctions, Swiss printing was no longer available and new inferior
quality "Saddam Dinars" were introduced and due to massive printing,
they were rapidly devalued to below 1000:1. The sad truth is, most
people who use this 1 Dinar = $3 of the old Swiss Dinar as an "RV"
benchmark don't even realize that the "RV" old-to-new value correction
they're waiting for already took place in 2003 when holders of the old
Swiss Dinar changed them up at a rate of 150:1 for the NID (New Iraq
Dinar)! ie, they were given 150 New Dinars for each old Swiss Dinar they
handed in, whereas the Saddam Dinar were exchanged only for 1:1 for the
NID to correct the value discrepancy between the old 3:1 Swiss Dinar
(long been demonetized) and the newer never had a 3:1 value NID notes
(which everyone owns today).

The over-printed NID (and Saddam
Dinars) have never ever had any exchange rate even remotely approaching
3:1. Only the pre-1991 "Swiss Dinars" did, and that 150:1 "RV" already
took place back in 2003, long before most modern Dinar speculators even
bought NID's post 2003. The only way of getting back to near parity vs
the $ is via a lop. There's simply no 3:1 value to "restore" the Dinar
to via an RV because the NID's never had that value in the first place.

As
for the amount of Dinars held by the US, most of that openly admits
it's just wild guessing, and even if they did, it wouldn't matter as
Iraq are going to "lop" meaning their value in US $ will not change.

I
can only end my post by saying : To the "RV" crowd, the Dinar is more
an emotional investment (like "Tulip Mania") than an economic one.
People aren't buying because they've sat down and done the impossible
maths - they're buying because others encourage them to "not miss out",
who in turn are encouraged by others who say the same thing, all in a
chain leading back to the pumpers who make their money not holding Dinar
- but from getting rid of them!

Why a lot of people still selling all their dinar when the withdrawal of
all the remaining US soldier will end in this month?don't they believe
in Sonny1's prediction by middle of January 2012 or should I say don't
we all believe in Sonny1's prediction? I do believe what Sonny1 and Adam
say. Does this means that the quickest all the remaining soldier back
to the states by this month, the closer we are to the RV. Don't they (
people that are selling their dinar ) want their dinar RV, do they?I am
confused why they are still selling when the time get closer.

Antara jawapan yang menarik

I have been doing this for 7 years at in the last 2 years each week
there was suppse to be a RV. Pumpers have posted information each and
every week about how close the RV is. The only thing that has happened
is the dealers making more money each week. Everytime it gets to be
November/December there is always a big push on how close we are and
leading people to buy more. Don't buy what you can't afford to throw
away and you will be fine. I got rid of a big chunk of mine and made
some investements that have made money for me. We heard Thanksgiving,
then now when the visit from M he will be bringing the RV with him, and
then of course March, 2012 is now on some sites. No one knows except
certain government officials if/when this will happen. Read the Iraq
news and not the Iraq rumor sections.

I hope everyone that did invest does get the chance to make some moeny
because we have all have had to deal with the weekly disappointments of
no RV after the weekly pumping. Review all the archives and you will
see some excellent articles on why it will happen after x, ,x,x, is
complete and you will see that it did not actually happen after the
events occured. You will see many articles that " it has to happen in
order for x to happen" but nothing really has to happen.

Stay grounded and do your own research. When it RV's it will be on the CBI website and you will know.